Consumer confidence in October was bolstered by an improving job market, but while the index at 72.2 is nearly at its highest level in five years, it is still below a reading of 90 that is considered representative of a healthy economy.
The two components of the Consumer Confidence Index also rose this month. The Present Situation Index increased to 56.2 from 48.7, while the Expectations Index is up to 82.9 from 81.5.
Lynn Franco, director of economic indicators at The Conference Board, said, “Consumers were considerably more positive in their assessment of current conditions, with improvements in the job market as the major driver. Consumers were modestly more upbeat about their financial situation and the short-term economic outlook, and appear to be in better spirits approaching the holiday season.”
The Consumer Confidence Index, up two months in a row, is at its highest level this year, and way above the all-time low of 25.3 in February 2009. Still, the last time it reached 90 was in December 2007.
According to the Conference Board, the current assessment of consumers who said jobs are “plentiful” increased to 10.3 percent from 8.1 percent. Consumers’ outlook six months out was optimistic, with those anticipating improvement in business conditions over the next six months up to 21.4 percent from 17.9 percent.
IHS Global Insight economist Chris G. Christopher, Jr. said, “Unlike many businesses, most Americans are not worried about the fiscal cliff. And most households are not worried about the European debt crisis and the economic slowdown in the emerging market economies.”
IHS is forecasting holiday sales to rise 4.5 percent above last year and believes that the boost in consumer mood will help holiday sales.
In a telephone interview, the economist expects that the impact from Hurricane Sandy on holiday sales will be short-term. By that he means that while spending over the next couple of weeks may be mostly for building materials to rebuild, as well as automobile repairs or replacement, things should return to normal by the “back end of November.”
Even if gas prices should increase as supply decreases due to a rise in demand to fill the tank at the pump or to fuel portable generators — generally considered a factor that hurts consumers’ discretionary spending — the economist said that should be just a short-term blip that might be reflected in November’s consumer confidence report but won’t be a concern once things return to normal.
As for apparel sales, the economist said, “For apparel, don’t expect consumers to head to the high-end stores, but family clothing should do well. One pattern we’ve seen outside of the hurricane is the bifurcation of the American consumer. They are going to the lower end and the upper end, your luxury and discount stores, while the ones in the middle tier are struggling.”
He’s expecting e-commerce to be strong for holiday. “One in every $20 is spent online. That’s a pretty big number. The percentage is getting higher and higher. The strong boost in seasonal hiring is [seen in the] couriers because those services are related to e-commerce retail sales.”
According to a Deloitte spokeswoman, the consulting firm also isn’t anticipating a major impact from Hurricane Sandy on the holiday season as a whole, and is keeping its forecast at between a 3.5 percent to 4 percent gain in holiday sales.
She also noted that in Deloitte’s annual holiday survey, 24 percent of respondents said they plan to delay their shopping until the presidential election has been decided. Half said the election won’t change their spending plans, while 23 percent said they were undecided on whether the election will affect how much they spend.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
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The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion