Consumer Confidence Soars to Post-Recession High
The Conference Board, New York, reported its Consumer Confidence Index, which had declined in October, rebounded sharply in November to its highest level in seven years.
The Index now stands at 107.1, up from 100.8 in October. The Present Situation Index increased from 123.1 to 130.3, while the Expectations Index improved from 86.0 last month to 91.7. (The Index stood at 111.9 in July 2007.)
“A more favorable assessment of current conditions coupled with a more optimistic short-term outlook helped boost confidence,” said Lynn Franco, Director of Economic Indicators with The Conference Board. “And while the majority of consumers were surveyed before the presidential election, it appears from the small sample of post-election responses that consumers’ optimism was not impacted by the outcome. With the holiday season upon us, a more confident consumer should be welcome news for retailers.”
“Confidence typically gets a bounce following a presidential election,” noted Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “The cutoff for the Conference Board’s survey was November 15, so some of the responses reflect the aftermath of the presidential election and the run-up in the stock market that followed it. Consumer confidence often rises in the aftermath of a presidential election, if for no other reason than a sense of relief that much of the disparaging commentary about the state of the economy tends to subside.”
The report said the percentage saying business conditions are “good” improved from 26.5 percent to 29.2 percent, while those saying business conditions are “bad” fell from 17.3 percent to 14.8 percent. Consumers’ appraisal of the labor market was moderately more positive than last month. The percentage of consumers stating jobs are “plentiful” increased from 25.3 percent to 26.9 percent, while those claiming jobs are “hard to get” was unchanged at 21.7 percent.
The report noted consumers’ short-term outlook, on balance, was more optimistic in November. The percentage of consumers expecting business conditions to improve over the next six months fell from 16.4 percent to 15.3 percent; however those expecting business conditions to worsen also decreased, from 11.8 percent to 10.0 percent. Consumers’ outlook for the labor market was likewise somewhat mixed. The proportion expecting more jobs in the months ahead was virtually unchanged at 14.5 percent, but those anticipating fewer jobs fell from 16.6 percent to 13.8 percent. The percentage of consumers expecting their incomes to increase–17.5 percent–was little changed from last month, while the proportion expecting a drop in income fell moderately, from 10.2 percent to 9.0 percent.
