Shoppers move through a Best Buy store on Nov. 23, 2012 in Naples, Florida. Photographer: Spencer Platt/Getty Images
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The Conference Board's confidence index climbed to 73.7, the highest since February 2008, from a revised 73.1 reading the prior month, figures from the New York-based private research group showed today. The median forecast of 75 economists surveyed by Bloomberg projected a reading of 73.
The report showed the share of Americans planning to buy a house rose to a record high, indicating improving property values and a job market recovery are making households more willing to make long-term commitments. Sustained gains in consumer spending, the biggest part of the economy, may help overcome concern over the fiscal cliff of tax increases and government spending cuts slated for early 2013.
"Confidence is holding up well," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, who projected the confidence measure would climb to 74. "Spending is going to continue to increase. This bodes well for the fourth quarter."
Other reports today signaled business investment may rebound and home prices are climbing.
Demand for goods such as machinery and electronics climbed in October by the most in five months, the Commerce Department reported. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, rose 1.7 percent last month, the most since May.
Property values rose in the year ended September by the most since July 2010, according to data from S&P/Case-Shiller. The index of home prices in 20 cities climbed 3 percent from September 2011, after advancing 2 percent in the year to August.
The gain in confidence may have been restrained by a plunge in the Middle Atlantic region, the area covering New Jersey, New York and Pennsylvania that was most affected by superstorm Sandy. That area's index plunged 14.6 points to a three-month low of 54.2. Seven of eight other regions saw confidence increase, the report showed, with the Mountain area being little changed.
Shares fell on concern about the budget negations in Washington. The Standard & Poor's 500 Index dropped 0.4 percent to 1,401.24 at 10:38 a.m. in New York.
Source: BusinessWeek | Shobhana Chandra