By and  on November 30, 2010

Public sentiment about the economy might be on an upswing just when retailers need it most.

With holiday purchasing kicking into high gear, the Consumer Confidence Index rose to 54.1 in November, its highest level since June, boosted by a rise in the expectations component to its highest mark since May.

The Conference Board reported Tuesday that the Present Situation Index inched up to 24 from 23.5, the highest level since August, while the Expectations Index jumped to 74.2 from 67.5 last month. The 54.1 overall rating comes against a downward revision to 49.9 in October. The consensus estimate among economists was 53.

Lynn Franco, director of The Conference Board Consumer Research Center, said, “Consumer confidence is now at its highest level in five months, a welcome sign as we enter the holiday season. Consumers’ assessment of the current state of the economy and job market, while only slightly better than last month, suggests the economy is still expanding, albeit slowly.”

Franco said she hoped the improvement in consumers’ moods will “continue in the months ahead.”

While consumers’ assessment of current conditions was essentially unchanged from last month, the respondents were more optimistic about future job prospects. Those who expect more jobs rose to 15.5 percent from 14.5 percent, while those who anticipate fewer jobs declined more dramatically, to 18.8 percent from 22.3 percent.

Chris Christopher, senior principal economist at IHS Global Insight, said, “Despite higher gasoline prices and a poor outlook on the housing front, consumers are more optimistic due to gains in the stock market, good news on jobs, sufficient deleveraging and relatively low prices.”

The economist concluded the increase in consumer optimism is “very good news for retailers” because, for many, holiday sales is still a “make or break situation.” He is forecasting a 4.5 percent gain in holiday retail sales from last year, excluding auto sales, gas and food services.

In the past 12 months, the index has been as high as 62.7, in May, and as low as 46.4, in February.

On Wall Street Tuesday, the S&P Retail Index dipped 0.3 percent, or 1.27 points, to 490.45, ending an up month on a down note. In November, retail stocks perked up 5.2 percent as the outlook for holiday brightened and the $3 billion deal to take J. Crew Group Inc. private lent credence to whispers that deep-pocketed investors are ready to start buying retail firms.

Markets in general have been in a retreat as Ireland’s budget woes and its $112 billion bailout plan reanimated concerns surrounding European debt.

The Dow Jones Industrial Average fell 0.4 percent, or 46.47 points, to 11,006.02, making for a 1 percent drop for the month.

Internationally, the CAC 40 fell 5.8 percent in Paris last month, as the FTSE 100 dipped 2.6 percent in London and the Hang Seng Index declined 0.4 percent in Hong Kong. Bucking the trend for the month were the Nikkei 225, ahead a robust 8 percent in Tokyo, and the DAX, up 1.3 percent in Frankfurt.

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