US consumer hopes at five-year peak
US consumer sentiment unexpectedly rose to its highest in five years in October in the latest in a string of encouraging signs from the economy that may boost President Barack Obama's re-election hopes next month.
The Thomson Reuters/University of Michigan's reading on consumer sentiment came in at 83.1, up from 78.3 the month before, and the highest since September 2007, the survey showed yesterday.
The new buoyancy among consumers comes shortly after the US unemployment rate tumbled to its lowest in nearly four years in September as more people returned to the workforce and found jobs than economists had predicted.
Economic issues have been a battleground in the election campaign as Mr Obama seeks to burnish his credentials as a competent manager of the economy, while Republican challenger Mitt Romney has faulted Mr Obama's record on job creation and growth.
Yesterday's sentiment report was the last before the November 6 general election and will be welcomed by Democrats.
"That kind of boost in consumer sentiment benefits an incumbent without question," said Julia Clark, a pollster with psos in Washington.
"The challenge that the Republicans have is continuing to attack the government's credibility on this issue while we actually are seeing data that suggest that consumer sentiment is improving."
US stocks were higher after the news but turned lower by midday as equities struggled to make headway after recently climbing to highs not seen in five years. The S&P 500 was down 0.4pc in afternoon trade.
October's unexpected jump in sentiment came as consumers felt better about the economy in both the long and the short term, the survey said.
"What changed was how they (consumers) evaluated economic conditions," survey director Richard Curtin said in a statement.
As well as September's employment report, there have been a number of other encouraging indications from the economy, including stabilising house prices, and last month's expansionary reading for the US manufacturing sector after three months of contraction.
In another positive sign for the housing sector, both JPMorgan Chase and Wells Fargo posted record profits yesterday as a recovery in the housing market this year boosted mortgage lending at both banks.
"We believe the housing market has turned the corner," JPMorgan Chief Executive Jamie Dimon said in a statement.