U.S. consumer confidence is at its highest level in more than five years, led by brighter views on current conditions, according to the preliminary November reading of the University of Michigan/Thomson Reuters Consumer Sentiment Index.
The index rose to 84.9 in November — the highest level since July 2007 — from a final October reading of 82.6.
The gauge of current conditions rose to 91.3, the highest since January 2008, from 88.1 in the prior month.
“Rising confidence might have been a tailwind that helped the president get reelected despite slow economic growth and high unemployment,” said analysts at RDQ Economics in New York. “However, we suspect if fiscal cliff issues are not resolved, consumer confidence is likely to take a hit around the turn of the year.”
The stock market stemmed its recent declines by recovering some ground today, as investors absorbed other positive economic data and President Barack Obama prepared to address the nation about the economy later today. The Washington Post reported this morning that Obama will propose a freeze on income tax rates for the middle class.
The nation’s trade deficit fell by 5.1 percent in September, its lowest level in nearly two years, as exports rebounded and imports rose at a slower rate.
The trade gap shrank to $41.5 billion from a downwardly revised $43.5 billion in August, according to seasonally adjusted numbers released by the U.S. Commerce Department.
Meanwhile, applications for U.S. unemployment benefits dropped by 8,000 to a seasonally adjusted 355,000 in the week ended Nov. 3, according to the U.S. Department of Labor.