November Consumer Confidence

The Conference Board’s Consumer Confidence report improved for the second month in a row in November and currently reads 54.1, up from 49.9 in October. It has yet to reach its recent high in May, but the improvement helps the outlook for the economy since consumer consumption is vital. As consumers feel better, they tend to spend more. This survey of consumers places lots of emphasis on the jobs market which helps explain its persistent weakness over the last few years.

Two of the key questions asked in the survey are specifically about the jobs market and the availability of work. While other questions may be added to this survey as conditions warrant, there are generally only 5 main questions in the report so the weak labor market is likely to weigh this indicator down until that portion of our economy improves.

The holiday season is a perfect time of year to see confidence trend upward. This incremental boost of sureness may help sales. The indicator is now at a five month high and the expectations portion is the highest since May. Those expecting business conditions to improve over the next six months rose to 16.7% from 15.8% in October, while those anticipating the state of things to get worse fell to 12.1% from 14.4% in the same period. The overall number is still very low (even for a recession, and we have been expanding since June 2009), but the past couple of months have slowly improved and that will have to do for now.