The Thomson Reuters/University of Michigan index of consumer
sentiment unexpectedly rose in early October to its highest level
since July 2007.
Separate data showed groundbreaking for new homes rose more than
expected last month, and taken together the reports pointed to solid
U.S. economic growth.
"The underlying strength of the U.S. economy remains intact," said
David Berson, an economist at Nationwide Mutual Insurance in
Columbus, Ohio. "If it were not for Ebola and geopolitical concerns,
these (sentiment) numbers would be higher."
The data for the sentiment survey was collected between Sept. 25 and
Oct. 15, a period in which Americans have been barraged by news of
Ebola's spread in West Africa, where it has killed thousands, and
its appearance in the United States.
U.S. officials have confirmed three Ebola cases, all in Dallas,
since Sept. 30 - a Liberian man who later died of the disease and
two nurses who had cared for him and are now being treated.
Investors have been concerned that Ebola, if not contained in the
United States, could scare consumers and lead them to cut back on
spending, though there is little sign of that so far.
The consumer sentiment survey period also overlapped with the global
stock market sell-off earlier this week.
Economists polled by Reuters had expected the sentiment index to
fall, but instead it ticked two tenths of a point higher to 86.4.
Consumers were more upbeat about their personal finances and the
Other measures of consumer confidence have also failed to show much
alarm. Gallup's daily poll of economic sentiment has been stable in
recent weeks. At least when it comes to spending decisions,
consumers remain focused on a strengthening economy.
"Despite rising media coverage, Ebola seems to have had little
discernible effect on consumer sentiment to date," Goldman Sachs
analyst Kris Dawsey said.
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The U.S. unemployment rate fell to 5.9 percent last month, a
six-year low. Investors think the stronger job market will lead the
Federal Reserve to raise interest rates next year after holding them
near zero since 2008, though worries about the global economy and
chronically low inflation have recently led them to bet the hike
would be delayed until late in the year.
HOUSING RECOVERY INTACT
A stronger job market helped the housing market recovery to advance
last month, with groundbreaking at building sites rising more than
Housing starts rose 6.3 percent to an annual 1.02 million-unit pace,
the Commerce Department said, the latest sign the sector was
continuing to claw back after the implosion that touched off the
2007-2009 financial crisis and recession.
Newly issued permits also rose.
"If you look at the trend, you are still seeing an upward
trajectory," said Michelle Meyers, an economist at Bank of America
Merrill Lynch in New York.
U.S. stock prices jumped following a batch of solid corporate
earnings reports, including profits by General Electric <GE.N> that
topped analyst expectations. Share prices had fallen sharply earlier
in the week, and the bounceback sucked money away from U.S.
government debt, pushing yields higher for a second straight day.
(Reporting by Jason Lange; Additional reporting by Richard Leong and
Rodrigo Campos in New York; Editing by Tim Ahmann)
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