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Title: Consumer Confidence in U.S. Rises to Five-Month High
Source:
Bloomberg
URL Source: http://noir.bloomberg.com/apps/news ... 0601087&sid=aub7HyHJjJAs&pos=2
Published: Nov 30, 2010
Author: By Courtney Schlisserman
Post Date: 2010-11-30 11:37:40 by Brian S
Keywords: None
Views: 1580
Comments: 1
Nov. 30 (Bloomberg) -- Confidence among U.S. consumers rose in November to the highest level in five months, a signal the biggest part of the economy may pick up strength. The Conference Board’s confidence index increased to 54.1, exceeding the median forecast in a Bloomberg News survey, from a revised 49.9 in October, figures from the New York-based research group showed today. Measures of employment and income expectations improved. Gains in consumers’ outlooks combined with discounts helped boost purchases at retailers such as Wal-Mart Stores Inc. during the Thanksgiving weekend. Citigroup Inc. and Hewlett-Packard Co. are among companies saying they plan to add jobs or increase worker pay, ingredients that may provide additional fuel for spending into next year. “Consumers are hopeful,” said Brian Jones, an economist at Societe Generale in New York. “Any improvement in the labor market will be viewed as positive.” Economists forecast the confidence gauge would improve to 53 from a previously reported 50.2 for October, according to the median of 78 projections in a Bloomberg survey. Estimates ranged from 50 to 60. The index averaged 96.8 during the last economic expansion that ended in December 2007. Stocks Decline Stocks trimmed earlier losses following the reports. The Standard & Poor’s 500 Index fell 0.4 percent to 1,182.71 at 10:24 a.m. in New York on concern the European debt crisis will worsen. Treasury securities rose, sending the yield on the benchmark 10-year note down to 2.77 percent from 2.82 percent late yesterday. A report earlier today showed home prices in 20 U.S. cities rose in September at the slowest pace in eight months, indicating the latest slump in sales is destabilizing housing. The S&P/Case-Shiller index of property values climbed 0.6 percent from September 2009, the smallest gain since January. Manufacturing, which helped lead the economy out of the worst recession since the 1930s, is still bolstering the expansion. The Institute for Supply Management-Chicago Inc. said today that its business barometer rose to 62.5 in November, the highest since April, from 60.6 in October. The Conference Board’s measure of sentiment about present conditions increased to 24 in November from 23.5 a month earlier. The gauge of expectations for the next six months rose to 74.2, the highest since May, from 67.5 in October. Employment Expectations The percent of respondents expecting more jobs to become available in the next six months increased to 15.5, the highest since June, from 14.5. The proportion of people who expect their incomes to rise over the next six months rose to 10.6 percent from 9.7 percent. The share of consumers who said jobs are currently plentiful rose to 4 percent this month, while those who said jobs are hard to get increased to 46.5 percent. A Dec. 3 report from the Labor Department is forecast to show the economy created 145,000 jobs in November, according to the median projection in a Bloomberg survey of economists. Employers added 151,000 jobs to payrolls in October, enough to keep the unemployment rate at 9.6 percent. With joblessness forecast to stay above 9 percent through next year, according to a Bloomberg survey earlier this month, Americans may keep paying down more debt and limit purchases. Such an outlook helps explain why Federal Reserve policy makers are injecting cash into the economy. Fed Forecasts U.S. central bankers revised down their estimates for next year’s growth to a range of 3 percent to 3.6 percent, from 3.5 percent to 4.2 percent forecast in June, according to minutes from their Nov. 2-3 policy-setting meeting. They also raised their unemployment projections for the next two years. Fed officials “generally agreed that the incoming data indicated that output and employment were continuing to increase, but only slowly,” according to the minutes. The economy expanded at a 2.5 percent pace in the third quarter, more than initially estimated, the Commerce Department said last week. Consumer spending rose at the highest rate in almost four years and wages and salaries increased at a 3.3 percent pace and were revised up for the second quarter. Retailers had a stronger start to the Christmas holiday shopping period. The average shopper spent 6.4 percent more over the Thanksgiving weekend than last year, the National Retail Federation said Nov. 28. About 212 million people headed to stores and visited websites, spending an average of $365.34. Holiday Promotions Wal-Mart and J.C. Penney Co. lured customers with promotions like a $5 Barbie doll and $10 diamond-accented earrings. Some Americans are more willing to make some big-ticket purchases. Auto sales rose at a 12.3 million annual rate in October, the most since August 2009, when the federal government’s “cash-for-clunkers” incentive program lifted the pace to 14.2 million, according to industry figures. “People who have jobs and have held off on making big purchases now are seeing investment improving a bit and are more comfortable about employment and are willing to make the leap,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “If people are willing to make a $30,000 investment in a vehicle, that to me shows a lot of confidence.” Leo Apotheker, chief executive officer of Hewlett-Packard said Nov. 22 that the world’s biggest computer maker will reinstitute salary raises in the current fiscal year. Citigroup plans to hire about 200 bankers by the end of 2011 to court companies with less than $20 million of annual sales. The share of respondents saying they’d purchase cars in the next six months rose to 5.4 percent, the highest since May, today’s Conference Board report showed. Those expecting to buy a home dropped to 1.7 percent, the lowest this year.
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#1. To: Brian S (#0)
Get back to us in 3 months and we'll see how much strength the economy has gained. We keep hearing that "may pick up strength" BS. We've been hearing it for 2 years.
the biggest part of the economy may pick up strength
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