U.S. consumer confidence reaches highest since global financial crisis on labor market optimism

Consumer confidence in the United States peaked to its highest level since the global financial crisis in 2007-2008, eyeing optimism in the country’s labor market, which is nearing full employment amid a solid rise in the gross domestic product (GDP).

The Conference Board’s index of consumer confidence rose to 107.1 in November (previous 100.8), more than reversing the decline during October. The outturn was significantly higher than both our (100.0) and consensus (101.5) expectations.

Consumer confidence reached a post-recession high as both the present situation rose to 130.3, from previous 123.1 and consumer expectations surged to 91.7, from previous 86.0, showing a strong rebound. The labor market differential, which measures the net share of consumers that saw employment as plentiful, rose to 5.2, from previous 3.6, suggesting that more people in the labor market are finding jobs plentiful than hard to get.

"The November data suggest that household confidence is strong, and we view this as constructive for consumer spending in Q4," Barclays commented in its recent research report.

Further, a separate report from the Commerce Department showed that consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 2.8 percent rate in the third quarter and not the 2.1 percent pace reported last month. That was still a slowdown from the second quarter's robust 4.3 percent pace.

In addition, rising house prices are also likely to keep consumption supported. The S&P’s CoreLogic Case-Shiller national home price index rose 5.5 percent in the year to September and is now just above the peak seen in July 2006.

Meanwhile, the dollar index remained bullish at 101.13, up 0.20 percent on the New York Stock Exchange (NYSE), while at 6:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -50.78 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex