WASHINGTON — Americans are more confident in the economy than they have been in seven months, an encouraging sign for President Barack Obama with six weeks left in the presidential race.
A new survey of consumer confidence rose Tuesday to its highest level since February on expectations that hiring will soon pick up. And a separate report showed home values rising steadily, signaling sustained improvement in housing.
Los Angeles Times
Mitt Romney's semantic misadventure with the "47 percent" helped alienate some of the narrow band of undecided voters whom the Republican needs to beat President Barack Obama in November. That's the single strongest sentiment registered this week by previously undecided voters interviewed by the Los Angeles Times.
None of nine uncommitted voters from a month ago said in follow-up interviews that they had warmed to former Massachusetts Gov. Romney. Five said they now planned to vote for Obama, two said they leaned toward the president, one remained entirely undecided and the ninth said he would not vote at all.
Although the tiny sample is far from statistically significant, it offers a glimpse of a group of voters expected to determine the outcome of the Nov. 6 vote. The same voters had told the USC Annenberg/Los Angeles Times Poll on Politics and the Press a month ago that they were open to both candidates. In the intervening month — which included the two conventions, Romney's 47 percent comment and unrest in the Mideast — not a lot of positive news accumulated for Romney.
Of the nine who described their feelings about the candidates in detailed phone interviews, six knew about Romney's comment — captured on a hidden-camera video — that 47 percent of the American people believe they are "victims" and are dependent on government, unwilling to "take personal responsibility and care for their lives."
"This is like an opinion poll on the economy without the political parties attached," said John Ryding, chief economist at RDQ Economics, a consulting firm. The confidence survey "says people are feeling better. If so, they are less likely to vote for change."
The Conference Board's index of consumer confidence shot up in September. The jump surprised many economists because the most recent hiring and retail sales figures have been sluggish.
The increased confidence could help explain recent polls that show Obama with a widening lead over Mitt Romney in some battleground states.
The consumer confidence index is closely watched because consumer spending drives nearly 70 percent of economic activity. The index jumped from 61.3 for August to 70.3 for September. It remains well below 90, the level that is thought to signify a healthy economy.
Among those feeling more optimistic about the economy is Darlene Johnson of Silver Spring, Md., who works for the National Institutes of Health. The value of Johnson's 401(k) account has risen. Home sales in her neighborhood have ticked up, too, and are commanding higher prices.
"I feel like things are stabilizing," she said. "I don't feel as uneasy as I did a few months ago."
But Johnson, who voted for Obama in 2008, remains undecided on which candidate to back. And she's still a bit nervous about the future.
"It will depend on how my pockets are looking," she says. "Everyday circumstances will drive my decision on how I am going to vote."
Economists point to some key reasons why consumers have grown more confident.
Stocks are up: The Standard & Poor's 500 stock index has surged nearly 15 percent this year. Gas prices have leveled off after rising for several months. And the broad increase in home prices is likely giving would-be buyers more confidence. When prices rise, buyers don't worry so much that a home might lose value after they bought it.
Home prices are up: National home prices rose 1.2 percent in July compared with a year ago, according to the Standard & Poor's/Case-Shiller index released Tuesday. That was the second straight month in which year-over-year home prices have increased.
Some economists question whether the higher level of confidence is sustainable. They've seen the index spike briefly before since the Great Recession ended more than three years ago. Some say confidence could be affected by negative campaign ads that focus on the economy.
But others note that even a weak economy doesn't feel so bad to many consumers once it begins to make steady improvement.
"The economy is perceived in relative rather than absolute terms," noted St. Louis University political scientist and pollster Ken Warren.
Mark Vitner, a senior economist at Wells Fargo, suggests that former President Bill Clinton might have helped boost confidence with his rousing speech on Obama's behalf at the Democratic National Convention in early September. The Conference Board's consumer confidence survey was conducted Sept. 1-13.
Clinton "rekindled memories of better economic times" and assured voters that the U.S. economy was on the right track, Vitner said.
The consumer confidence survey polled 500 people. The part of the survey that gauges consumers' confidence in the economy now and the part that gauges their outlook for the next six months both rose. Consumers were much more optimistic about the short-term outlook for business conditions, employment and their financial situation.
The rising home prices could also help Obama's prospects. Prices are rising in many large cities in swing states such as Florida, Colorado, Michigan and North Carolina. Prices have risen 3.6 percent in Tampa, Fla., in the past year, for example. And they're up 5.4 percent in Denver, 6.2 percent in Detroit and 2.2 percent in Charlotte, N.C.