NEW YORK – Consumer confidence soared in November as declining gasoline prices and an improving job market contributed to a stronger than expected reading that could bode well for the holiday shopping season.
The Conference Board said Tuesday that its Consumer Confidence Index rose to 98.9 this month from 85.2 in October. Analysts had expected a reading of 90. The results reversed a two-month decline.
“A decline of more than 40 cents in gasoline prices this month and the improving job outlook have combined to help restore consumers’ confidence,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement.
“While the index remains below its pre-Katrina levels, the shock of the hurricanes and subsequent leap in gas prices has begun wearing off just in time for the holiday season,” Franco said.
Still, she warned, holiday spending will be fueled by the bargains consumers have come to expect.
The sharp rebound in confidence helped send the Dow Jones industrial average up 43.16, or 0.4 percent, to 10,933.88 in late morning trading.
Investors were also reassured by two other economic reports. The Commerce Department announced a 3.4 percent increase in orders for big-ticket manufactured goods in October. The agency also announced that sales of new single-family homes shot up by 13 percent in October, the biggest one-month gain in more than 12 years.
The upbeat reports indicate that the economy is recovering from the blow wielded by the Gulf Coast hurricanes, but the nation’s merchants still face challenges this holiday season. Although gasoline prices have fallen, they are still higher than a year ago, and home heating costs are expected to force consumers to budget carefully this winter.
While the nation’s retailers are still analyzing sales figures from last weekend, the official start of the holiday shopping season, it appeared those offering the best discounts brought in the most customers. Discounters and electronics retailers attracted more customers than mall-based apparel stores.
The International Council of Shopping Centers reported sales at stores open at least a year, known as same-store sales, rose 5.1 percent for the week ended Saturday compared to a year ago.
ShopperTrak RCT Corp., which monitors retail sales at 45,000 outlets, reported that sales for the combined Friday, Saturday and Sunday period rose 0.4 percent from a year ago. It said across-the-board discounting earlier in the weekend may have tempered how many dollars were generated by sales, but improved as the big bargains expired late Saturday and Sunday.
With such deep discounting, stores were under pressure to sell more items to meet their sales goals.
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