The consumer is back--well if not fully, then at least part of the way, as data from the Conference Board would suggest. In fact, in a survey issued within the past hour, that New York-based research organization reported that consumer confidence had risen to 72.2 in October, which was well above the downwardly revised reading of 68.4 for September. Initially, the September survey had come in as 70.3. The latest reading was the highest point for that survey since February of 2008, when the nation was just in the formative stages of the long and difficult recession.
The estimate for October had been 72.5, or just above the actual reading. The monthly survey covers 5,000 U.S. households. The progressively better results likely reflect the better stock market and the somewhat more optimistic consumer income trends. There also may be a slow improvement in some aspects of the employment situation. Here, earlier today, the government reported that first-time jobless claims had fallen by 9,000 to 363,000 in the latest seven-day stretch. Tomorrow, we are due to get additional data on job growth when the federal government reports on payroll creation and unemployment for the month of October.
As for the various components of this report, which was delayed by two days due to the ravages of Hurricane Sandy, the so-called present situations index, a more current picture of sentiment, also rose last month, climbing from 48.7 in September to 56.2 in October. Expectations, a more forward-looking metric, and one that tends to be more optimistic, also gained, rising from 81.5 to 82.9.
Finally, the better employment outlook was not really reflected in that part of the survey, as the data, while noting that those who saw jobs as plentiful increased last month, the gain was only from 8.1 to 10.3. As to those who see jobs as not necessarily plentiful, the results actually backtracked some from 51.2 to 50.3.
Overall, however, this was a good report, and one that raises some hope that following the tragic dislocations brought about by the mammoth hurricane, and the short-term penalty to fourth-quarter GDP growth, the business expansion should gather momentum in 2013.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.