December 2, 2010
An index of U.S. consumer confidence rose in November 2010 to the highest level since June, with consumers more optimistic about future business conditions and job prospects, the Conference Board reported. The index rose to 54.1; economists polled by MarketWatch had expected a reading of 53. Confidence for October was revised to 49.9 from a prior estimate of 50.2.
“Hopefully, the improvement in consumers’ mood will continue in the months ahead,” said Lynn Franco, director of Conference Board’s consumer research center, in a statement.
The Conference Board’s index helps analysts compare fluctuations in confidence, with a reading of 100 for the base year of 1985. Generally when the economy is growing at a good clip, confidence readings are at 90 and above.
A barometer of consumers’ expectations rose to 74.2 in November—the highest level since May—from 67.5 in October. In November, 16.7% of consumers said they expect business conditions to be “better” in six months, up from 15.8% in October. Most consumers expect business conditions to be the same. Also, 18.8% of consumers expect there be to fewer jobs, down from 22.3% in the prior month. Most consumers expect the same number of jobs.
Consumer confidence is “exceptionally depressed,” reflecting labor-market weakness, wrote Dan Greenhaus, chief economic strategist with Miller Tabak, in a research note.
“It is hard to envision a sustained pickup in expectations without a commensurate move lower in the unemployment rate,” Greenhaus wrote.
While economists say the recession officially ended last year, the labor market remains weak. Economists polled by MarketWatch expect a gain of 155,000 jobs and for the unemployment rate to remain at a high 9.6%.
Meanwhile, consumers’ assessment of the present situation ticked up to 24 from 23.5. Looking at the present situation, a few more consumers in November said jobs are “plentiful.” However, most consumers still said that jobs are “not so plentiful” or “hard to get.”
When it comes to their buying plans, 5.4% of consumers in November said they have plans to buy an automobile within six months, up from 5.2% in October. The percentage of those with plans to buy a home fell to 1.7% from 2.2%, and those with plans to buy major appliances fell to 24.4% from 25.4%.