US consumer confidence boosts retail sales as fewer claim dole
FEWER Americans than expected sought unemployment benefits and consumer confidence climbed last week, giving the world's largest economy a boost heading into 2012.
Unemployment claims fell by 4,000 to 364,000 last week, the lowest level since April 2008, US Labour Department figures showed yesterday.
The Bloomberg Consumer Comfort Index improved to -45 last week from a reading of -49.9 the prior week, marking the biggest seven-day gain since January.
A decline in firings and the cheapest petrol prices since February are helping to revive retail sales during the busiest shopping season of the year.
A stronger consumer, whose spending accounts for 70pc of the economy, raises the odds the US can ride out the debt crisis in Europe or failure by Congress to extend tax cuts.
"Spending has looked pretty good so far, and continued job and income growth will help maintain that," said Samuel Coffin, an economist at UBS Securities in New York, who projected claims would fall to 365,000. "At some point, events in Europe are likely to have some effect on activity, but we're heading into that headwind with a lot of momentum."
Stocks rose on the improving jobs outlook, sending the Standard & Poor's 500 Index higher for a third day.
Treasury securities (bonds) advanced, sending the yield on the benchmark 10-year note down to 1.96pc from 1.97pc at the close of trade the previous day.
"This is great news," said Ian Shepherdson, chief economist at hedge fund High Frequency Economics. "One unexpectedly low number can easily be a fluke. Two are interesting. Three are telling us something real is happening in the labour market," he said.
The Bloomberg comfort index rose last week to the highest level in five months as all three components -- state of the economy, buying climate and personal finances -- improved.
The figures are consistent with other findings.
The Thomson Reuters/ University of Michigan final index of consumer sentiment climbed to 69.9 in December, a six-month high, Reuters said yesterday.