Consumer confidence in November reached its highest point since June, easily beating analysts' forecasts and further lifting the hopes of retailers at the start of the holiday shopping season. The monthly index provided by the Conference Board showed consumer confidence climbed to a 54.1 rating last month, up from 49.9 in October.
"Expectations, the main driver of this month’s increase in confidence, are now at the highest level since May," said Lynn Franco, director of the Conference Board's research center. "Hopefully, the improvement in consumers’ moods will continue in the months ahead."
Along with an improvement in overall confidence, the Conference Board reports consumers are also slightly more upbeat about future job prospects. Those expecting fewer jobs in the months ahead declined to 19% from 22% in November, while 16% now believe there will soon be more employment opportunities. This optimism could be a precursor to actual growth, as a separate report last week showed 93,000 private sector jobs were added in November, the majority of them (54%) tied to small businesses. In the last nine months, small businesses have hired back 200,000 workers.
On the holiday shopping front, several major retailers, including JC Penney, Macy's and Abercrombie reported significant year-over-year November sales increases. On Black Friday weekend alone, shoppers spent $45 billion, focusing less on discounters and more on department stores and apparel shops.
Overall, the economy expanded at a 2.5% pace in the third quarter, more than first thought, according to a new U.S. Commerce Department report. Consumer spending rose at its highest rate in almost four years, while salary gains have been revised upward for the past two quarters.
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