WASHINGTON -- U.S. consumers were slightly more confident in the economy in May than in April, partly because of strengthening optimism about future hiring and income gains.
The Conference Board said Tuesday that its confidence index rose to 83 from a revised 81.7 in April. That's the second-highest reading since January 2008, just after the recession began. Only March was higher at 83.9.
The increase is "enough to suggest decent, but not spectacular, gains in consumers' spending," said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note to clients.
The confidence report was one of three key economic reports released Tuesday. Standard & Poor's/Case-Shiller said U.S. home prices rose in March and Commerce Department said orders for durable manufactured goods rose in April.
Consumer confidence has climbed steadily since it bottomed out at 25.3 in February 2009. It sits significantly above last year's average of 72.3, but it still isn't back to healthy levels. The figure regularly topped 90 before the recession.
A rising stock market helped confidence in May, economists said. Gains, however, were likely limited by higher gasoline prices pushing in the opposite direction.
Overall, Americans are much more bullish about the job market, the Conference Board's survey showed. That's a good sign that hiring may have been healthy this month. The government will report May's jobs figures June 6.
The number of Americans who consider jobs easier to find rose to a six-year high. And 15.4 percent of consumers expect hiring to pick up in the next six months, up from 14.7 percent in April.
The survey also showed that nearly one-fifth of Americans expect their incomes to grow over the next six months, the highest level since December 2007. More Americans said they planned to buy cars in the next six months, though the percentage saying they planned to buy houses fell to the lowest level in 15 months.
Consumer sentiment is a closely watched figure, as consumer spending accounts for 70 percent of the nation's economic activity.
Home prices in 20 U.S. cities rose at a slower pace in the year ended in March as the housing market began to weaken at the start of 2014.
The S&P/Case-Shiller index of property values increased 12.4 percent from March 2013, the smallest 12-month gain since July, after rising 12.9 percent in the year ended in February, a report from the group showed Tuesday in New York.
Still-tight lending standards for some Americans and a rise in mortgage rates since mid-2013 have slowed demand, limiting the ability of sellers to keep asking even higher prices. An increased availability of cheaper properties, faster job and income growth, and a sustained drop in borrowing costs this year would help draw more buyers into the market.
"The upward trajectory of prices remains in place, but with a slower rate of appreciation," said Michael Gapen, senior U.S. economist at Barclays Capital Inc. in New York. "There's still reason to suspect that home prices will rise -- credit availability, on the margin, is actually getting better," labor market progress is gaining strength and average income is improving, he said.
Orders for durable goods unexpectedly climbed for a third month in April, a sign U.S. factories will help the U.S. economy strengthen.
Bookings for goods meant to last at least three years rose 0.8 percent after a 3.6 percent gain in the previous month that was stronger than previously reported, the Commerce Department reported. Orders for military hardware surged by the most since December 2012.
A pickup in growth is propelling orders for electrical equipment, appliances and computers, benefiting companies such as Cisco Systems Inc. and Whirlpool Corp. Demand for cars and homes, together with the need to replace aging machinery, will underpin investment at the same time the global economy starts to improve.
"We're looking at a nice upward trend for orders," said Robert Brusca, president of Fact & Opinion Economics in New York, who projected a 1 percent gain in orders of durables. "The signals for manufacturing are pretty good. It's going to be an important contributor to growth."
Information for this article was contributed by Christopher S. Rugaber of The Associated Press and by Michelle Jamrisko and Shobhana Chandra of Bloomberg News.
Business on 05/28/2014