The Conference Board puts together one of the most widely read consumer confidence reports once a month, and its findings for November bode well for businesses looking for a big holiday season. The top line number in the survey made an impressive double-digit gain over October’s reading, based on strong future expectations.
The Conference Board Consumer Confidence Index shot all the way from 40.9 in October to 56.0 in November. A score of 100 is equal to the state of consumer sentiment in 1985 – so despite the positive result, there is still ground to make up.
The Present Situation Index is still fairly weak, but rose from 27.1 to 38.3. Meanwhile, the Expectations Index was the bigger driver of the improved top-line score, rising from 50.0 to 67.8.
Consumer outlook is improving but still leaves much to be desired. Only 13.6% expect improved business conditions in the next six months, but that’s up from 10.2% in October; on the flip side, 15.8% expect the economy to weaken, better than October’s 21.3% results.
The employment outlook improved along similar lines. 12.9% expect more jobs, up from 10.8%; meanwhile 24.1% expect less jobs, down from 27.6%. And 14.9% are expecting an increase in personal income, up from 11.1%.
Conference Board’s Lynn Franco said, “Confidence has bounced back to levels last seen during the summer (July 2011, 59.2). Consumers’ assessment of current conditions finally improved, after six months of steady declines. Consumers’ apprehension regarding the short-term outlook for business conditions, jobs and income prospects eased considerably. Consumers appear to be entering the holiday season in better spirits, though overall readings remain historically weak.”
RBR-TVBR observation: Confidence polls are very much a soft statistic, but with all the gloom and doom we see in the headlines, we must admit we were very surprised to see such a positive result here. If it can be sustained, it could be the start of a virtuous circle – confidence breeds spending, which breeds economic growth and job creation, which breeds more confidence, and so on. Fingers crossed!