Consumers in U.S. Gain Confidence as Firings Recede: Economy
By Shobhana Chandra and Alexandria Baca - Aug 8, 2013
American consumers last week were the most upbeat in more than five years as firings retreated for the first time to the lowest level since before the recession, paving the way for a pickup in economic growth.
The Bloomberg Consumer Comfort Index (COMFCOMF) rose to minus 23.5 for the period ended Aug. 4, its strongest reading since January 2008, a report today showed. The average number of workers applying for jobless benefits declined to 335,500 in the four weeks ended Aug. 3, the least since November 2007, according to Labor Department data.
All income groups save one saw confidence improve last week, with the biggest advances coming at the lower end of the pay scale, signaling the job market is thawing for a bigger share of households. The decline in worker dismissals may be a precursor to a pickup in hiring, which will sustain household spending and give the expansion a lift for the rest of 2013.
“The labor market is probably the most important determinant of the rise in confidence,” said Jim O’Sullivan, the Valhalla, New York-based chief U.S. economist at High Frequency Economics, and the second-best forecaster of claims over the past two years, according to data compiled by Bloomberg. “If the labor market keeps chugging along, as it seems likely to do, consumer spending should start to pick up in the second half.”
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http://www.bloomberg.com/news/2013-08-08/jobless-claims-in-u-s-over-past-month-drop-to-lowest-since-2007.html