US consumer confidence rises

US consumer confidence rose more than forecast in November, reaching a seven-year high and indicating Americans will be in the mood to step up holiday spending.

The Thomson Reuters/University of Michigan preliminary sentiment index increased to 89.4, exceeding the highest estimate in a Bloomberg survey and the strongest since July 2007, from a final reading of 86.9 in October.

A stronger labour market, cheaper fuel costs, and near- record stock prices are brightening consumers’ spirits as the busiest time of the year for retailers gets under way.

Bigger wage gains would probably drive sentiment and boost household spending, which accounts for almost 70 per cent of the economy.

"Retailers should expect a good holiday season ahead," said Brian Jones, senior US economist in New York at Societe Generale.

Employers have added an average 228,500 workers a month to payrolls so far this year, the strongest pace since 1999. A report yesterday from the Department of Labor showed the number of unemployed vying for each available job is dropping. About two jobless workers were pursuing each opening in September, the fewest since early 2008 and down from almost seven in July 2009.

- Bloomberg