Bad news for Dems
Consumer confidence surged to a two-year high this month as Americans took note of the steadily improving job market, the Conference Board reported yesterday.
Job gains have averaged about 200,000 a month this year after three years of job losses. But consumers — distracted by record-high gasoline prices and problems in Iraq — were slow to notice the trend until gas prices eased this month.
The better job prospects have helped to keep home sales at record levels despite higher interest rates. New-home sales stayed just shy of a record annual rate of 1.33 million last month, the Commerce Department reported yesterday, while existing-home sales jumped to a new high of nearly 7 million.
Double-digit gains in home prices in Washington and other areas have helped to bolster confidence while increasing household wealth and purchasing power.
And while the surge in home sales since March partly reflects a rush to market by buyers locking in low mortgages rates, it also is one of the most concrete ways consumers can show optimism that their personal finances and the economy are holding up.
"With all eyes on the Democratic convention in Boston, President Bush got some encouraging news from the economic front" with the surge in the confidence index to 106.1 from 102.8 in June, said Edward Yardeni, chief investment strategist with Prudential Equity Group.
He noted that confidence now is close to the level it was at when President Clinton won re-election in 1996. By contrast, the index was at half the current level when presidents Jimmy Carter and George Bush lost their re-election bids in 1980 and 1992, respectively.