Higher consumer confidence should translate to increased holiday spending… consumer spending drives nearly 70 percent of U.S. economic activity this holiday spending should result in an improved U.S. economy.
San Francisco, CA (PRWEB) December 05, 2012
Consumer confidence in the U.S. as reported by The Conference Board rose to 73.7 in November, the highest levels since February 2008. While this is still lower than the reading of 90 that indicates a healthy economy, it is a vast improvement from the record low of 25.3 that was reported in February 2009. The Conference Board CCI last reached the 90 level in December 2007, the first month of the Great Recession.
Says Lynn Franco, Director of Economic Indicators at The Conference Board: “The Consumer Confidence Index increased in November and is now at its highest level in more than four and a half years (76.4 Feb. 2008). This month’s moderate improvement was the result of an uptick in expectations, while consumers’ assessment of present-day conditions continues to hold steady. Over the past few months, consumers have grown increasingly more upbeat about the current and expected state of the job market, and this turnaround in sentiment is helping to boost confidence.”
According to The Conference Board, American consumers are more optimistic because they believe the job market is improving. There were 171,000 jobs added to U.S. payrolls in October, and both September and August employment numbers were revised to be higher than initially believed.
The recent Thomson Reuters/University of Michigan Surveys of Consumers backs up this belief, with many survey respondents saying they feel the unemployment rate will decline in the coming 6 months.
The Conference Board survey found that most consumers view current conditions to be the same as they were in October. The expectations for an increase in available jobs, however, rose from 19.7 percent in October to 20.3 percent in the recent survey.
There was also a rise in the number of consumers surveyed who felt that jobs were plentiful from 10.4 percent in October to 11.2 percent in November. This is the highest level in four years and is a good sign for hiring.
Higher consumer confidence should translate to increased holiday spending, which is already being borne out by initial holiday spending over the Thanksgiving weekend. Because consumer spending drives nearly 70 percent of U.S. economic activity this holiday spending should result in an improved U.S. economy.
In addition, more Americans said that they plan to buy new appliances, take a vacation, or purchase a home according to the survey. Nearly 7.0 percent of Americans said they plan to buy a home, which is the highest percentage on record. On the negative side, the percentage planning to purchase a car fell.
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