US consumer confidence rose in October to its highest in more than four years as Americans became more upbeat above improvements in the labor market. Another report showed that consumer attitudes also gained as well as consumers' labor market assessment.
By: Reuters With CNBC.com
Published: Thursday, 1 Nov 2012 | 10:16 AM ET
U.S. consumer confidence rose in October to its highest in more than four years as Americans were more upbeat about improvements in the labor market, a private sector report showed on Thursday.
The Conference Board, an industry group, said its index of consumer attitudes gained to 72.2 from a downwardly revised 68.4 in September. It was the highest level since February 2008, though it came in shy of economists' estimates for 72.5.
September was originally reported as 70.3.
The expectations index edged up to 82.9 from 81.5, while the present situation index jumped to 56.2 from 48.7.
Consumers' labor market assessment improved, with the "jobs hard to get" measure slipping to 39.4 percent from 40.7 percent. The "jobs plentiful" gauge gained to 10.3 percent from 8.1 percent.
Consumers "appear to be in better spirits approaching the holiday season," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.
U.S. stocks added to gains immediately following the release while Treasurys prices slipped slightly.
Consumers views on price increases were unchanged from September with expectations for inflation in the coming 12 months holding at 5.9 percent.
The report had originally been scheduled to be released on Oct 30, but was postponed due to the storm that hit the U.S. northeast.
Construction Spending Rises
A separate report showed that U.S. construction spending rose in September by the most in three months as stronger spending on homes made up for drops in business and government projects.
Construction spending climbed 0.6 percent to an annual rate of $851.6 billion, the Commerce Department said on Thursday. That was in line with analysts' forecasts in a Reuters poll.
August's outlays were revised to a less sharp 0.1 percent drop.
Home building is expected to add to economic growth this year for the first time since 2005, although the housing sector remains a shadow of what it was before a collapsed housing bubble helped trigger the 2007-09 recession.
Spending on private residential projects rose 2.8 percent, a reflection of this year's improving housing market.
Muting the gain in overall construction, however, private spending on nonresidential projects fell 0.1 percent. That could be another sign that businesses have lost some confidence when it comes to investing.
Public sector construction spending fell 0.8 percent, declining for a third straight month. A 0.3 percent drop in state and local spending fueled the overall decline, while outlays on federal government projects slipped 6.2 percent.
Manufacturing Growth Picks Up
Meanwhile, the pace of growth in the U.S. manufacturing sector picked up modestly in October as new orders improved, though a measure of employment slowed, an industry report released on Thursday showed.
The Institute for Supply Management (ISM) said its index of national factory activity rose to 51.7 from 51.5 in September, topping economists' expectations for a slight decline to 51.2, according to a Reuters poll of economists.
A reading above 50 indicates expansion in the manufacturing sector. It was the second month in a row the sector has grown after contracting through the summer.
After helping support the U.S. economic recovery, the sector has faltered recently in the midst of slower growth in China and uncertainty surrounding the euro zone debt crisis.
The forward-looking new orders measure gained to 54.2 from 52.3, but employment cooled to 52.1 from 54.7.
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