Consumers wary, even as economic reports show progress
A host of reports released in the last week show improving economic signs in everything from manufacturing and construction, to restaurants and real estate. However, this has yet to connect with consumers, who don't see the economic improvement -- a sentiment reflected by a downturn in consumer confidence numbers.
A Commerce Department report showed October construction spending was up 0.8 percent from September, and up 5.3 percent from October of last year. Meanwhile, the National Restaurant Association’s Restaurant Performance Index rose to a four-month high in October. And, while October saw only a slight increase in home prices (less than 1 percent), they are still up significantly on the year.
Manufacturing continued to expand in November, as seen in The Institute for Supply Management’s manufacturing index for the month. It jumped nearly a full percentage point from October, indicating expansion. November was the fifth straight month the index had risen and also the highest it has been in all of 2013. And things don't look to go sour anytime soon. The ISM’s New Orders Index increased in November as well. Meanwhile, demand from overseas for US products also increased.
All this is probably why The Conference Board’s index of leading economic indicators was up for October. It increased 0.2 percent, and September’s numbers, which originally came in at 0.7 percent, were revised to a 0.9 percent increase. In August the index rose 0.7 percent.
Despite all this The Conference Board’s consumer confidence index continued to drop last month. It fell to 70.4 in November, down from 72.4 the month before. A closer look at the numbers shows just how low consumer expectations are. According to the report, "sentiment regarding current conditions was mixed, with consumers saying the job market had strengthened, while economic conditions had slowed," and, "when looking ahead six months, consumers expressed greater concern about future job and earning prospects."
