More Americans this month said the economy was improving than at any time in eight years as the job market picked up.
The share of households viewing the economy as heading in the right direction rose to 34% in March, the most since January 2004, pushing the Bloomberg monthly expectations gauge to a one-year high of 1. The weekly Bloomberg Comfort Index was minus 34.9 in the period ended March 18, down from a four-year high of minus 33.7 over the previous seven days.
“The sense that things have finally stabilized has clearly boosted confidence,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “Downside risk to both the overall level of comfort and Americans perceptions of the direction of the economy remains” as fuel prices increase, he said.
The best six months of job growth since 2006 is probably behind the increase in optimism, raising the odds that the spending that accounts for about 70% of the economy will strengthen. Gains in incomes and employment may be among reasons households have so far been able to weather the jump in gasoline prices.
The weekly comfort index has been higher than minus 40 for the past six weeks, the longest stretch of readings above recession levels since the first half of 2008.
The number of Americans filing applications for unemployment benefits dropped last week to the lowest level in four years, reinforcing signs the labor market is improving, Labor Department figures showed today. Jobless claims decreased by 5,000 to 348,000 in the week ended March 17, the fewest since February 2008.
Confidence among men was minus 28.2 last week, up from last year’s low of minus 51.3 reached in September. The measure for women, at minus 41.3, has climbed 15.2 points from its 2011 low.
Still, higher gasoline prices may be limiting gains in confidence. The average price of regular gasoline at the pump climbed to a 10-month high of $3.86 a gallon on March 20, according to AAA, the nation’s largest auto club. It’s climbed 58 cents this year.
“We’re beginning to see positive signs that the economy is improving,” Randy Potts, president, chairman and CEO of Winnebago Industries Inc., said during a March 15 conference call. “Consumer confidence has been trending higher, and the jobless rate is improving. Both the stock market and housing markets are showing signs of improvement, but rising fuel prices do remain a concern.”