Buyers cheered by gains in hiring

Consumers said willing to spend

A shopper stops to take a selfie as crowds pour into the Macy’s Herald Square flagship store in New York on Nov. 28. A new report said consumer confidence rose in December as steady job gains and a surging stock market made Americans more optimistic about the economy and hiring.
A shopper stops to take a selfie as crowds pour into the Macy’s Herald Square flagship store in New York on Nov. 28. A new report said consumer confidence rose in December as steady job gains and a surging stock market made Americans more optimistic about the economy and hiring.

WASHINGTON - U.S. consumer confidence jumped in December on a better outlook for hiring and overall growth, supporting other signs that show the economy could accelerate in 2014.

The Conference Board, a private, New York-based research group, said Tuesday that its index of consumer confidence rose to 78.1 in the final month of 2013, up from 72.0 the previous month. In its latest report, the board revised November’s confidence figure up from 70.4.

Consumer confidence is nearly back to where it was before the partial government shutdown in October. Steady job gains and a surging stock market have made Americans more optimistic about the economy and hiring both now and in the next six months.

“The upbeat consumer mood bodes well for spending in 2014,” said Michael Dolega, senior economist at TD Economics.

Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pa., said consumers will continue “to do some of the heavy lifting for the economy.”

“The job market is better. Stock prices are rising. The odds of another round of political brinksmanship are lower,” Sweet said.

Optimism about the job market is at a five-year high. That is a positive sign for a strong December jobs report, which will be released next week.

Olindy Cinada, 24, of Newport News, Va., said he’s seen “a lot more job openings in the past month.”

He was hired in December as a meter reader for the Newport News Waterworks, the regional water provider owned and operated by the city. As a result, he and his wife plan to buy a home.

A better job market could also drive more spending, which accounts for 70 percent of economic activity.

A last-minute surge of online shopping helped boost overall holiday spending, according to MasterCard Advisors’ SpendingPulse report. Sales from Nov. 1 through Dec. 24 rose 3.5 percent compared with the year before, the firm said last week.

Retail sales rose 3.5 percent during the holiday season, helped by deep discounts at malls and purchases of children’s apparel and jewelry, MasterCard Advisors SpendingPulse said.

Sales of holiday-related categories, such as clothing, electronics and luxury goods, rose 2.3 percent from Nov. 1 through Dec. 24 compared with a year earlier, the Purchase, N.Y.-based research firm said Dec. 26. SpendingPulse tracks total U.S. sales at stores and online via all payment forms. Americans increased their spending in November by the most in five months, according to government data, led by big gains in auto purchases.

Other measures are also indicating a pickup in confidence. The Bloomberg Consumer Comfort Index jumped to a four-month high for the week that ended Dec. 22. The Thomson Reuters/University of Michigan final index of consumer sentiment climbed in December to a five-month high.

The Conference Board’s confidence index averaged 73.3 in 2013, according to economists at Barclays Capital, the highest since 2007. That’s above the 45.2 average in 2009, when the economy was in recession for half the year. But it is still below the reading of 90 that is consistent with a healthy economy.

The share of respondents who said they expected better business conditions in the next six months rose to 17.2 percent from 16.7 percent.

“Despite the many challenges throughout 2013, consumers are in better spirits today than when the year began,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement.

The consumer confidence report also indicated Americans are willing to spend more on large purchases. The percentage of Americans planning to buy a home in the next six months rose to the highest level since July. And the proportion of Americans planning to purchase a major appliance in the next six months rose in December from the previous month.

Better hiring is putting more money in more Americans’ wallets. Employers have added an average of 200,000 jobs a month in the past four months, a big improvement from the summer. Those gains have helped push the unemployment rate to 7 percent, a five-year low.

There are some weak spots: Income rose at a slower pace than spending in November.

That means Americans saved less to spend more. And existing home sales have fallen for three straight months, held back by higher prices and mortgage rates.

Still, the economy expanded at a 4.1 percent annual rate in the third quarter, the best showing in nearly two years.

Information for this report was contributed by Christopher S. Rugaber of The Associated Press and Shobhana Chandra and Chris Middleton of Bloomberg News.

Business, Pages 25 on 01/01/2014

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