Consumer confidence reached its highest level in nearly five years, a fact reaffirmed by shoppers who spent a record amount during the Black Friday weekend.
Shoppers spent $59.1 billion at retail outlets last weekend, according to the National Retail Federation, an increase of 13 percent over a year ago. Online sales for the same period were $1.04 billion, a 26 percent gain from last year. Cyber Monday online sales jumped more than 30 percent from last year, setting a record.
That comes alongside news from The Conference Board that the consumer confidence index climbed to 73.7 in November, the highest rating since February 2008. While that is still below 90, the level typically associated with a healthy economy, it is an increase over the October rating of 73.1 and well above the all-time low of 25.3 set in February 2009.
Consumers Confident in Job, Housing Markets
The Conference Board, a New York-based private research group, surveyed 2,500 Americans about the economy and job market. Researchers found optimism was high in nearly every category, especially employment and housing.
“This month’s moderate improvement was the result of an uptick in expectations, while consumers’ assessment of present-day conditions continues to hold steady,” Lynn Franco, director of economic indicators at The Conference Board, said in a statement. “Over the past few months, consumers have grown increasingly more upbeat about the current and expected state of the job market, and this turnaround in sentiment is helping to boost confidence.”
For many consumers, the confidence boost meant going out and participating in the traditional opening of the holiday shopping season. The average shopper spent $423 over the weekend, up from $398 a year ago. Foot traffic at retail stores was up 3.2 percent.
“Everyone is feeling very bullish,” said Matthew Shay, chief executive of the National Retail Federation. “The entire week is really getting extended with special promotions that roll out in waves.”
Holiday Sales Expected to Grow
Holiday sales overall are expected to increase by 4.1 percent, to about $586.1 billion. Some of that increase is expected to come from online shoppers, who currently represent about 10 percent of the sales during the holiday shopping.
The NRF estimates that more than 129 million Americans shopped on Cyber Monday, a 5 percent increase over 2011. Amazon.com has not released its Cyber Monday stats, but they are expected to beat last year’s figures, when 17.7 million items were purchased, a rate of 200 items per second.
Much of the increased confidence is the result of an improving job market. Employers added 171,000 jobs in October. The Conference Board’s survey found that the percentage of Americans who expect more jobs to be available in the next six months rose from 19.7 percent in October to 20.3 percent in November, and the percentage who think jobs are “plentiful” improved from 10.4 percent to 11.2 percent.
The most surprising result from The Conference Board survey related to home buying. According to the survey, 6.9 percent of people, the highest level on record, said they planned to buy a home in the next year. Sales of previously owned homes unexpectedly climbed in October, and the median price rose 11.1 percent from a year earlier, according to the National Association of Realtors.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].
- The Conference Board. (2012, November 27). The Conference Board Consumer Confidence Index Increases Again [Press release]. Retrieved from http://www.conference-board.org/press/pressdetail.cfm?pressid=4662
- Chandra, S. (2012, November 27). Cyber Monday sales best ever, for Amazon's Kindle too. Reuters. Retrieved from http://www.reuters.com/article/2012/11/27/us-amazon-kindle-idUSBRE8AQ0QT20121127
- Rugaber, C., and Crutsinger, M. (2012, November 27). Consumer Confidence in U.S. Increases to Four-Year High. Associated Press. Retrieved from http://www.ctpost.com/news/us/article/US-economy-gets-lift-from-consumers-businesses-4069701.php#ixzz2DWX9ias2