NEW YORK (AP) - Consumer confidence soared in November as declining gasoline prices 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 better-than-expected 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, the holiday spending will be fueled by the bargains consumers have come to expect.
One component of the report, which examines consumers' views of the current economic situation, rose to 114.0 from 107.8. The expectations index, which measures consumers' outlook over the next six months, surged to 88.8 from 70.1 last month.
Economists closely track consumer confidence because consumer spending accounts for two-thirds of U.S. economic activity.
The Conference Board index is derived from responses received through Nov. 16 to a survey mailed to 5,000 households in a consumer research panel. The figure released Tuesday include responses from at least 2,500 households.
Consumers' assessment of present-day conditions improved in November. Those claiming business conditions are "good" increased to 25.5 percent from 23.3 percent. Those claiming conditions are "bad" decreased to 17.3 percent from 18.4 percent. Labor market conditions also appear to be improving. Consumers saying jobs are "hard to get" decreased to 23.2 percent from 25.3 percent, while those claiming jobs are "plentiful" was virtually unchanged at 20.8 percent.
Consumers' outlook for the next six months is considerably more upbeat, although not as optimistic as earlier this year. Those expecting business conditions to worsen decreased to 11.7 percent from 18.5 percent. Those expecting business conditions to improve rose to 18.8 percent from 14.1 percent.
The outlook for the labor market is also more optimistic. Those expecting more jobs to become available in the coming months increased to 14.2 percent from 12.3 percent, while those expecting fewer jobs fell to 17.7 percent from 24.0 percent in October. The proportion of consumers anticipating their incomes to increase in the months ahead improved to 20.9 percent from 17.4 percent last month.
