Consumer confidence climbed to the highest level in more than five years and home prices advanced by the most in seven as the housing rebound gives the U.S. economy a lift.
Bloomberg reported that the Conference Board’s sentiment index rose to 76.2 in May, exceeding all estimates in a Bloomberg survey of economists and the highest since February 2008, data from the New York-based private research group showed today. The S&P/Case-Shiller index of property values in 20 cities increased 10.9% in the year to March, the biggest 12-month gain since April 2006.
Rising property and stock values are boosting household finances, helping Americans cope with an increase in the payroll tax and wage gains that have barely kept up with inflation.
“We’re getting back on track,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, the top-ranked forecaster of Case-Shiller data over the past two years, according to data compiled by Bloomberg. “Housing continues to look very solid in a broad-based manner. We’re continuing to expand.”
The median estimate in a Bloomberg survey projected the consumer confidence index would rise to 71.2. Forecasts (CONCCONF) of the 75 economists polled ranged from 65 to 76. The April reading was revised up to 69 from a previously reported 68.1 in April. The measure averaged 53.7 in the recession that ended in June 2009.
The Conference Board’s gauge of consumer present conditions advanced to 66.7 in May, the highest since May 2008. The measure of expectations for the next six months jumped to 82.4, the highest since October.