More Americans this month said the world's largest economy will improve than at any time in the past decade, led by a surge among Democrats after the re-election of President Barack Obama.
The share of households projecting the economy will get better rose to 37 percent in November, the highest since March 2002, according to a Bloomberg consumer survey.
Rising home values, job growth and falling gasoline prices are shoring up household finances. Improved consumer spending will help sustain the expansion as lawmakers strive to avoid the so-called fiscal cliff of tax increases and spending cuts, an outcome that Federal Reserve Chairman Ben Bernanke said will put the economy on firmer footing in 2013.
"The outlook is better than it has been over the last three or four years — that's what Bernanke told us," said Harm Bandholz, chief U.S. economist at UniCredit Group in New York. "The recovery is gaining momentum. When the fiscal cliff is sorted out, I think growth will go up."
The Bloomberg gauge showed the jump in expectations this month was the biggest among registered Democrats, with 63 percent indicating the economy will improve, up 12 percentage points from October. Among independents, 26 percent had a positive response, while 15 percent of Republicans answered affirmatively, both little changed from October.
"The gain is largely political in nature, occurring very disproportionately among Democrats," said Gary Langer, president of Langer Research Associates in New York, which compiles the index for Bloomberg. "Gains in views the economy is improving, to be truly persuasive, will need to be more broadly based."
A budding housing recovery is helping to shore up household wealth.