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Economic gains boost US confidence to 5-year high

Agencies | Updated: 2013-05-29 07:20

Economic gains boost US confidence to 5-year high

Job seekers line up to submit their resumes during an employment fair in La Roca Village, near Barcelona, May 21, 2013. [Photo/Agencies]

The Conference Board found that optimism is growing mostly among those earning more than the median household income of roughly $50,000. For those households, the confidence index jumped to 95.1 from 85.3.

Among most other income groups, confidence either rose more slowly or fell. For those earning $15,000 to $24,999, for example, the confidence index rose modestly, from 52.6 to 55.9. And for those earning $25,000 to $34,999, it slipped from 59.8 to 57.9.

Economists say the disparity points to the gain in stock prices, which mostly benefits more affluent Americans.

Consumers' outlook on the job market also improved last month. The percentage who said jobs are plentiful rose, and the percentage who said they're hard to find declined. Economists say the shift suggests that the pace of hiring could pick up.

The economy has added an average of 208,000 jobs a month since November. That's well above the monthly average of 138,000 during the previous six months. The job growth has helped reduce the unemployment rate to a four-year low of 7.5 percent.

Some of the decline in unemployment is due to fewer people looking for work. The government counts people as unemployed only if they're actively searching for a job.

The economy grew at an annual rate of 2.5 percent in the January-March quarter, up from a rate of just 0.4 percent in the October-December quarter. The fastest expansion in consumer spending in more than two years drove the economy's growth.

Many economists think growth is slowing slightly in the April-June quarter to an annual rate between 2 percent and 2.5 percent. But lots of analysts say growth should strengthen in the second half of the year, boosted by the gains in housing and employment.

A key reason the Case-Shiller index of home prices jumped in March was that a growing number of buyers were bidding on a tight supply of homes.

In Phoenix, prices rose by 22.5 percent over the past 12 months, the biggest gain among cities. That was followed by San Francisco (22.2 percent) and Las Vegas (20.6 percent).

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