Consumer comfort level climbs for first time in five weeks
Washington - Confidence among American consumers rose last week for the first time this year, a sign the strain on households from a higher payroll tax is easing.
The Bloomberg Consumer Comfort Index climbed to minus 36.3 in the period ended Feb. 3 from minus 37.5, which was the weakest since early October. The gain, reflecting advances by all three of the measure's components, was the first in five weeks and within the margin of error of 3 percentage points.
A strengthening job market and higher stock prices are bolstering confidence after households winced following this year's two percentage-point increase in the levy that funds Social Security. At the same time, climbing gasoline costs may prevent consumers from building on a fourth-quarter pickup in spending that helped offset a plunge in military outlays.
"An easing of policy tensions in Washington and sustained improvement in the labor market likely prevented further deterioration" in sentiment, said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. "The gains appear somewhat tentative given rising gasoline prices, which are reducing discretionary consumption just as households are having difficulty adjusting to the resetting of the payroll tax."
A report from the Labor Department showed claims for unemployment benefits remain at a level seen in the second half of 2012. Applications for jobless benefits dropped by 5,000 to 366,000 in the week ended Feb. 2. Economists forecast 360,000 claims, according to the median of 53 estimates in a Bloomberg survey.
The comfort index's measure of personal finances climbed to minus 1.6, the highest level this year, from minus 3.8 the prior week. The index assessing Americans' views on the current state of the economy improved to minus 63.6 from minus 64.1.
The buying climate index rose to minus 43.8 from the prior week's minus 44.4, which was the weakest since September. Some 28 percent of those surveyed said it a good time to buy things they want and need.
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