US consumer confidence rose in November, paving the way for a strong start to the holiday shopping season.
More broadly, the improved sentiment represents another sign of an economy on the mend – although the progress remains slow.
The Consumer Confidence Index jumped to 54.1 in November, up from a level of 49.9 a month earlier, the Conference Board reported Tuesday. The gains mainly reflect improving expectations for job growth and an economic recovery.
Although the index remains well below its prerecession levels (which were above 100), the boost provides a welcome updraft for the economy as the big retail season surrounding the holidays gets under way. The survey was done just before Thanksgiving week, which saw bigger shopping activity than in 2009. Black Friday was Nov. 26 and Cyber Monday was Nov. 29.
"The increase in consumer optimism is very good news for retailers," writes Chris Christopher, at the economic research firm IHS Global Insight, in an analysis of the numbers. "This report is pointing to a more promising holiday retail sales season."
The research firm predicts that overall holiday retail sales will be 4.5 percent higher than last year.
Online shopping appears to be rising even faster, fueled by free-shipping offers and the convenience of using armchairs rather than shopping carts.
Firms that track online shopping cite strong year-over-year gains in sales – not just on Cyber Monday but also during surrounding days. Specifically:
• Online sales on Cyber Monday were about 31 percent larger than on Black Friday, reckons another research firm, IBM Coremetrics. While not putting a dollar figure on sales, the firm also estimated that Cyber Monday volume was up 19 percent from the same day in 2009.
• Some individual retailers saw even bigger gains. An example is eBags, an online seller of handbags and luggage, which saw Cyber Monday sales jump 51 percent from a year ago, according to ChannelAdvisor, a service provider for online retailers.
If consumers appear more upbeat, they still face some big challenges.
The good news is they are growing more optimistic that the economy will add jobs in the months ahead and that the economy will improve.
"Expectations ... are now at the highest level since May," Conference Board research director Lynn Franco said in releasing the numbers. "Hopefully, the improvement in consumers’ mood will continue in the months ahead.” Separate Conference Board indicators, one designed to forecast the job market and one to forecast overall economic growth, have also risen in November.
But millions of consumers still are under stress from high debt levels, unemployment, or home values that have sagged since 2007. One part of the Consumer Confidence Index – a gauge of people's current financial situation – remains at an unusually low level of 24. That's way under the low point of about 60 that this indicator hit following the 2001 recession, for example.