NEW YORK — Optimism appeared to take root this month as more favorable labor market conditions drove consumer confidence higher.

The Conference Board’s Consumer Confidence Index, based on a monthly survey of 5,000 households, revealed Tuesday that consumer attitudes became more upbeat in October, sending the reading up 4.1 points to 81.1 from an upwardly revised 77 in September. The improvement this month reverses a downward trend in September.

The overall gains in the confidence index were driven by increases in both of its components. The Expectations half, which assesses consumer attitudes for the next six months, advanced 2.2 points to 90.7 from 88.5, while the Present Situation, which takes into account consumers’ current views, strengthened 7.1 points to 66.8 from 59.7, representing the first increase in five months.

The percentage of respondents who said in October that jobs were plentiful rose, while it dropped among those who believe jobs are hard to come by.

“A more favorable job market spilled over into the consumer confidence turnaround,” Lynn Franco, director of the board’s Consumer Research Center, said.

Franco said she believes that, with October’s climb, good times are ahead: “If we see another boost in the present situation, I think we are on our way to a strong confidence reading, which obviously paints a positive picture for spending as well.”

The rise in the index contributed to an up day on Wall Street as the Dow Jones Industrial Average rose 1.5 percent to 9,748.31, the Nasdaq advanced 2.6 percent to 1,932.26 and the Standard & Poor’s Retail Index logged a 2.7 percent advance to end the day at 386.53.

John Lonski, an economist with Moody’s Investors Services, said he was pleased with the report, saying it indicated the job market is stabilizing and offered evidence that an improved holiday shopping season is ahead.

“The latest showing, along with the strong back-to-school season, is portending a healthy, livelier holiday shopping season,” Lonski said. He noted he is anticipating a 5 percent sales increase for apparel retailers, an improvement over last year’s 3.5 percent advance.

Also boosting economists’ sentiments was the 0.8 percent rise in orders for durable goods designed to last three years or more.“We are in good shape; the economy will improve,” Lonski said, warning that any external shock from Iraq, terrorism or dollar exchange rates would amount to a setback.

In a sign consumers are more easily finding jobs, Lonski noted the job market in September showed its strongest signs of revival since the start of the year, as a government report said employment rose by 57,000 in September, the first increase since January, and the unemployment rate held steady at 6.1 percent.

Consumers’ appraisals of present conditions ended a five-month losing streak as those reporting jobs are “hard to get” eased to 33.8 percent from 35.1 percent. Those claiming jobs are “plentiful” rose to 11.8 percent from 9.9 percent. Consumers’ assessments of current business conditions also improved, with those rating conditions as “good” increasing to 17.2 percent, up from 16.2 percent. Those claiming conditions were “bad” fell to 28.4 percent from 29.5 percent.

Things looked better on the employment horizon as well. Those anticipating more jobs to become available in the next six months increased to 19.7 percent from 16.6 percent. Those expecting fewer jobs to become available decreased to 20.8 percent from 21.1 percent. Expectations for wages were more modest as those anticipating an increase in their incomes fell to 16.7 percent from 19 percent.

Those expecting business conditions to improve over the next six months rose to 23.2 percent from 21.3 percent. Consumers expecting business conditions to worsen edged down to 11.3 percent from 11.9 percent.

To continue reading this article...

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus