US consumers show more confidence, increase spending in Nov

29 November 2011 18:27  [Source: ICIS news]

WASHINGTON (ICIS)--US consumers are more hopeful about the future, the Conference Board said on Tuesday, although their degree of confidence remains at historically weak levels.

The Conference Board, a 94-year-old business analysis firm based in New York City, said that its consumer confidence index rose sharply in November from October, more than offsetting last month’s drop.

Based on a survey conducted in the first two weeks of November, the index rose to 56 from 40.9 in October, the board said.

The index is measured against a 100 baseline established for 1985.

Lynn Franco, director of the board’s consumer research department, said that “Confidence has bounced back to levels last seen during the summer”. The index was at 59.2 in July this year.

“Consumers’ assessment of current conditions finally improved,” she added, “after six months of steady declines.”

“Consumers appear to be entering the holiday season in better spirits, though overall readings remain historically weak,” she said.

Consumer spending is the principal driving force of the US economy, accounting for as much as 70% of all production and commercial activity.

Low consumer confidence has been blamed for the still struggling US economic recovery overall and for the ongoing depression in the nation’s housing sector.

The National Retail Federation (NRF) said that consumer spending over the four-day US Thanksgiving holiday weekend improved substantially from the same period last year, suggesting that consumers are more confident about their near-term prospects.

The federation said that consumer spending in that crucial pre-Christmas shopping period was up by 9% from last year to an estimated $52.4bn (€39.3bn). Retail sales also saw improvement in October.

But the Conference Board noted that while consumer confidence has improved, it remains at low levels.

“The proportion of consumers anticipating business conditions to improve over the next six months increased to 13.6% [for November] from 10.2%,” in October, the board said.

The board characterised that reading as “less negative” rather than positive.

($1 = €0.75)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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