Consumer sentiment rose to its highest mark in more than five years as a result of the rebound in housing and record stock prices - both of which are helping make Americans more confident the expansion will continue.
The Bloomberg Consumer Comfort Index climbed to minus 29.2 in the week ended April 14, the highest since January 2008, from minus 34 during the previous period.
The gain in confidence was the biggest in more than a year and considered to be broad-based across every age group, all regions and most income brackets, raising the odds that any slump in consumer spending will prove temporary. The mood of those on the lower end of the pay scale, however, remained depressed by a slowdown in hiring and higher taxes.
"Upper-income Americans continue to feel buoyant on the sustainable recovery," said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. "The difficulties that can be observed down the income ladder reflect the significant split in the fortunes of upper-income Americans and low-income cohorts."
The measure assessing Americans' views on the state of the economy climbed to minus 54.7, the highest since late January 2008. The index of whether consumers believe it a good time to buy improved to a four-month high of minus 34.6.
Elsewhere, in a separate report, consumer confidence may be buoyed also by real estate prices, which are on the upswing. The S&P/Case-Shiller index of property values in 20 cities rose 8.1% in January from the same month last year, the biggest gain since June 2006, according to a recent report.
The outlook for the second quarter is less optimistic amid signs consumers are worried about the increase in the payroll tax that took effect in January, and as employment cools.
The Bloomberg Consumer Comfort Index's monthly expectations gauge showed 36% of respondents, the largest share in the survey and equal to last month's reading, said the economy was "staying the same." The Bloomberg comfort index stands in contrast to other measures that have recently slipped.
The Thomson Reuters/University of Michigan sentiment gauge declined in April to a nine-month low. The Conference Board's confidence barometer fell more than forecast in March.