Consumer Confidence Surges in November but Remains Historically Low
Amid better jobs reports and pre-holiday spending, consumers have a more positive outlook on the economy for the first time since summer.
Consumers’ overall feelings about the economy surged in November, according to a report released by the Conference Board on Tuesday. Consumer confidence - which measures - rose in November to 56 from 40.9 in October. The Present Situation index rose to 38.3 from 27.1, and the Expectations index rose to 67.8 from 50.
Says Lynn Franco, Director of The Conference Board Consumer Research Center: "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.”
But while the consumer outlook has improved from sad levels, it is far from what would be viewed as “good” - it is more appropriately described as “not as bad.”
“Consumers' apprehension regarding the short-term outlook for business conditions, jobs and income prospects eased considerably,” Franco said. “Consumers appear to be entering the holiday season in better spirits, though overall readings remain historically weak."
For example, the percentage of consumers who thought business conditions were “good” increased 2% in November - but it is still only 13.3% of all who were surveyed. The percentage who stated they thought business conditions were “bad” declined 5.5% to 38.2% in November, but that is a very large portion who don’t have a positive outlook.
Only 5.8% of consumers surveyed thought that “jobs were plentiful” in November, but that was a 2.2% increase from consumers who felt that in October. Those who said jobs are “hard to get” declined in November to 42.1% from 46.9%.
So though November brought higher expectations for consumers, we still have a lot of recovering to do before the majority have a positive outlook on the U.S. economy.