NEW YORK Consumer confidence rose to a four-and-a-half-year high in November as consumers became more optimistic about the outlook for the economy, according to a private sector report released on Tuesday.
The Conference Board, an industry group, said its index of consumer attitudes rose to 73.7 up from an upwardly revised 73.1 the month before, its highest since February 2008. Economists had expected a reading of 73.0, according to a Reuters poll.
October was originally reported as 72.2.
RAY STONE, ECONOMIST AND MANAGING DIRECTOR, STONE & MCCARTHY RESEARCH ASSOCIATES
"It's good news. The reading was the highest since February 2008. Consumers' views of current and expected employment conditions went up so the overall index seems to be driven by those perceptions. Despite the 'fiscal cliff,' hurricane Sandy, and a weaker stock market in November, households seem to be upbeat. That means they should be willing to spend money on Christmas. Shoppers won't be busting down doors, but sales should be pretty upbeat. We're seeing some strengthening here in all of these indicators. It makes me feel better about the sustainability of the recent expansion. Not that it will get away from us, but it will be sustained in the quarters and years ahead. We're inching ahead."
PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK:
"It's obviously good news. In the immediate present it's good news because it does not confirm the late-month downward shift in sentiment reflected in the Reuters/University of Michigan consumer sentiment data.
"This number indicates that confidence was pretty steady in November, and maybe even rose. It confirms the big improvement in confidence in October when there was a sharp upward assessment in people's views of their present situation. That full increase was preserved this month.
"This doesn't make people spend sharply beyond their income, but it suggests they will be more inclined to buy big ticket items which is an important part of getting the economy to grow.
"The issue, though, is still income, because that is still the restraint on consumer spending. Only if the economy grows faster will employment incomes grow."
DAVID SLOAN, ECONOMIST, 4CAST LTD, NEW YORK:
"They were a little better than expected, although it is only a fairly minor change and nothing to get terribly excited about. The Michigan (survey) was little changed and this one hasn't really seen much change either. It seems like people are still reasonably positive on employment. It is a slightly positive number but only a fairly modest rise.
The consumer seems to have made a reasonably positive start to the holiday season -- the chain store data were positive today and the confidence numbers are resilient. It does look like the economy has got some momentum and the data today has generally been on the firm side. It seems like we have got an economy that is growing and as long as they avoid the fiscal cliff problem we should have a decent 2013
KATHY LIEN, MANAGING DIRECTOR, BK ASSET MANAGEMENT, NEW YORK
"The number was a bit of a surprise considering other indicators, such as the University of Michigan report, showed us a deterioration in sentiment. And stocks performed quite poorly between October and November. Nonetheless, this does bode well for the holiday shopping season. It suggests consumers are not as nervous about the fiscal cliff as some might have believed. This has led to a small gain in the U.S. dollar. It shows there's more hope for the U.S. economy than for other developed ones."
MARKET REACTION: FOREX: The dollar extended gains versus euro and Japanese yen
(Americas Economics and Markets Desk; +1-646 223-6300)