The Conference Board consumer confidence index, which had declined in October, improved dramatically in November. The index now stands at 98.9, up from 85.2 in October.
The present situation index rose to 114 from 107.8. The expectations index surged to 88.8 from 70.1 last month.
“A decline of more than 40 cents in gasoline prices this month and the improving job outlook have combined to help restore consumers’ confidence,” said Lynn Franco, director of The Conference Board Consumer Research Center. “While the index remains below its pre-Katrina levels, the shock of the hurricanes and subsequent leap in gas prices has begun wearing off just in time for the holiday season. Despite this latest boost in confidence, holiday spending will be driven by the bargains consumers have come to expect.”
Consumers’ assessment of present-day conditions improved in November. Those claiming business conditions are “good” increased to 25.5 percent from 23.3 percent. Those claiming conditions are “bad” decreased to 17.3 percent from 18.4 percent. Labor market conditions also appear to be improving. Consumers saying jobs are “hard to get” decreased to 23.2 percent from 25.3 percent, while those claiming jobs are “plentiful” was virtually unchanged at 20.8 percent.
Consumers’ outlook for the next six months is considerably more upbeat, although not as optimistic as earlier this year. Those expecting business conditions to worsen decreased to 11.7 percent from 18.5 percent. Those expecting business conditions to improve rose to 18.8 percent from 14.1 percent.
The outlook for the labor market is also more optimistic. Those expecting more jobs to become available in the coming months increased to 14.2 percent from 12.3 percent, while those expecting fewer jobs fell to 17.7 percent from 24 percent in October. The proportion of consumers anticipating their incomes to increase in the months ahead improved to 20.9 percent from 17.4 percent last month.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.
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