The holiday season isn’t just bringing cheer this year, it’s bringing back consumer confidence in the American economy.
The Conference Board, a private research company, reported that Americans’ confidence in the economy bounced back to its highest level since July, following a successful shopping holiday weekend, the Associated Press reported. Consumer Confidence Index rose 15 points to 56.0, up from a dismal 40.9 in October, which was the lowest level since the recession. It was also the highest jump in confidence since July, which was at a level of 59.2, the AP reported.
Although the top reading is 90 on the Conference Board’s index, the number was encouraging of a successful holiday shopping season. This is especially good news as American home prices have dropped in September.
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The index still remains historically low and is still not quite at its peak of 72 seen in February, Reuters reported.
"This is a huge rise in consumer confidence. It gets us back to second-quarter levels and further underscores the dramatic move that we've seen in consumer spending," said Lindsey Piegza, economist at FTN Financial in New York, Reuters reported. "Generally when the consumer becomes happier, more confident, they're generally more likely to dip their toes back into spending."
The boost of confidence may help sales during the holiday season, which accounts for as much as 40 percent of retailers’ annual revenue, Bloomberg BusinessWeek reported. Following the report’s release, stocks gained during morning training.
"I'm surprised that we're surprised and that markets got such a nice pop on it,” said Phil Flynn, senior market analyst with PFG Best in Chicago, Reuters reported. “But all you had to do was look at Black Friday sales to see that it would be strong.”
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