(NEW YORK) — American consumers are feeling better about the economy.
Consumer confidence rose this month to 83.7 — better than expected and its highest level since July 2007, according to the University of Michigan’s Consumer Sentiment Index. In April, the figure stood at 76.4.
“Overall, a number of indicators in the economy have been improving,” said Rebecca Jarvis, ABC News’ chief business and economic correspondent, “and that has positively impacted the mind and the psychology of the American consumer.”
“The Dow above 15,000 for the first time, the S&P 500 hitting new records every day — that helps when you think about the mind of the consumer,” Jarvis said. “As does housing values improving, as does the fact that gasoline prices have sunk to a large degree over the last couple of months.”
There is one place where there’s still room for improvement.
“The jobs picture,” Jarvis said. “It has improved to some degree, [but] it’s still not where we would consider normal.”
U.S. employers added 165,000 jobs to their payrolls last month, taking the unemployment rate down to 7.5 percent.
“A normal jobs picture would be with unemployment more like 5 or 6 percent,” Jarvis said, “and we’re still a ways away from that. The reason we care so much about a number like this is that it looks at what the future of our economy could hold and it looks at it from the perspective of the consumer.”
“Consumer spending accounts for 70 percent of economic growth and so when the consumer is feeling better, the consumer tends to spend more,” she added.
In a separate report, the index of leading indicators from The Conference Board — a non-profit business research group — rose 0.6 percent last month. The index aims to predict future growth and was pushed higher by the housing recovery.
Copyright 2013 ABC News Radio
Lois M. Collins, Deseret News
Tana Bolinger, FamilyShare