Consumer Confidence Jumps

Woman carries shopping bag over credit cards and money collage
AP
Consumer confidence soared in November as declining gasoline prices and an improving job market contributed to a stronger-than-expected reading that could bode well for the holiday shopping season.

The Conference Board said Tuesday that its Consumer Confidence Index rose to 98.9 this month from 85.2 in October. Analysts had expected a reading of 90. The better-than-expected results reversed a two-month decline.

"A decline of more than 40 cents in gasoline prices this month and the improving job outlook have combined to help restore consumers' confidence," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.

"While the index remains below its pre-Katrina levels, the shock of the hurricanes and subsequent leap in gas prices has begun wearing off just in time for the holiday season," Franco said.

Still, she warned, the holiday spending will be fueled by the bargains consumers have come to expect.

Investors were also reassured by two other economic reports. The Commerce Department announced a 3.4 percent increase in orders for big-ticket manufactured goods in October. The agency also announced that sales of new single-family homes shot up by 13 percent last month, the biggest one-month gain in more than 12 years.

The upbeat reports indicate that the economy is recovering from the blow wielded by the Gulf Coast hurricanes, but the nation's merchants still face big challenges this holiday season. Although gasoline prices have fallen in recent weeks, they are still higher than a year ago, and home heating costs are expected to force consumers to budget carefully for the holidays.

While the nation's retailers are still analyzing sales figures from last weekend, the official start of the holiday shopping season, it appeared those offering the best discounts brought in the most customers. Discounters and electronics retailers attracted more customers than many mall-based apparel stores.

The latest updates on spending last weekend Tuesday were encouraging.

The International Council of Shopping Centers reported sales at stores open at least a year, known as same-store sales, rose 5.1 percent for the week ended Saturday compared to a year ago.

ShopperTrak RCT Corp., which monitors retail sales at 45,000 outlets, reported that sales for the combined Friday, Saturday and Sunday period rose 0.4 percent from a year ago.