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Confidence among U.S. consumers unexpectedly jumped in October to the highest level since before the recession began five years ago, raising the odds that retailers will see sales improve.

The Thomson Reuters/University of Michigan preliminary October consumer sentiment index increased to 83.1, the highest level since September 2007, from 78.3 the prior month. The gauge was projected to fall to 78, according to the median forecast of 71 economists surveyed by Bloomberg News.

Rising stock and property values along with falling joblessness may keep giving Americans a psychological boost, brightening the household-spending outlook during the year-end holidays. Improving confidence may play a role in next month’s election as Republican challenger Mitt Romney tries to make a case for unseating President Barack Obama, a Democrat.

Stocks extended earlier gains after the report. The Standard & Poor’s 500 Index climbed 0.2 percent to 1,435.31 at 10:43 a.m. in New York.

The gain in Michigan’s sentiment reading exceeded the improvement in other measures. The Bloomberg Consumer Comfort Index held last week near a three-month high with more Americans saying it was a good time to make purchases.

The gain in Michigan’s sentiment reading exceeded the improvement in other measures. The Bloomberg Consumer Comfort Index held last week near a three-month high with more Americans saying it was a good time to make purchases even as they grew more pessimistic about the economy.

The Michigan index of consumer expectations six months from now, which more closely projects the direction of consumer spending, climbed to 79.5, the highest since July 2007, from 73.5 in September. The gauge of current conditions improved to 88.6 from 85.7.

We are very encouraged by the positive signs we see in the general economy,” Randy Potts, chief executive officer of Forest City, Iowa-based Winnebago Industries Inc., the biggest U.S. maker of motor homes, said on an earnings teleconference yesterday. “Past experience has shown that motor-home sales closely correlate to both consumer confidence and new single- family housing starts, both of which are now showing real signs of improvement.”

The company announced revenue rose 24.5 percent in the fiscal fourth quarter from the same time last year.
http://www.bloomberg.com/news/2012-10-12/consumer-sentiment-in-u-s-ros
e-in-october-to-pre-recession-high.html

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