Originally created 11/26/03

Consumer confidence hits highest level in more than a year

NEW YORK -- Steady improvements in the job market helped push consumer confidence in November to its highest level in more than a year, a private research group reported Tuesday.

After rebounding last month, the Conference Board's Consumer Confidence Index rose again to 91.7 in November, up from a revised 81.7 in October. The reading, the highest since September 2002, was well ahead of the 85.0 projection by analysts.

"Consumer confidence is now at its highest level since the fall of 2002," said Lynn Franco, director of the board's consumer research center.

Perceptions of the current economy improved, Franco said, a sign that "consumers believe a slow but sure labor market turnaround is underway. The rise in expectations is a signal that consumers will end this year much more upbeat than when the year began."

The strong one-month rise in the confidence reading shows that consumers are taking notice of recent reports on the nation's improving employment situation, economists said.

Those reports have shown that the economy added 125,000 jobs in September and another 126,000 positions in October. At the same time, new claims for unemployment benefits have continued to decline in a sign that employers are easing up on layoffs.

"I think that consumers just stood up and took notice of it (reports on the improving employment picture) and changed their attitudes," said John Silvia, chief economist with Wachovia Corp.

The number of consumers who now say jobs are "hard to get" declined to 29.5 percent from 33.7 percent, according to the Conference Board. Those who indicate jobs are plentiful increased to 13.2 percent from 11.8 percent.

The board's reading was released shortly after the Commerce Department reported Tuesday that the economy steamrolled back at 8.2 percent annual growth rate in the third quarter, the fastest pace in nearly two decades.

That figure, much more robust than analysts had expected, bolsters hopes that the nation's long stagnant business climate is finally shaking off its lethargy.

Stocks rose modestly following release of the reports. The Dow Jones industrial average was up 6 points at 9,754. The Nasdaq composite index was up 4 points to 1,951. The Standard & Poor's 500-stock index was up nearly two points at 1,054.

The Conference Board's reading was derived from responses received through Nov. 17 to a survey mailed to 5,000 households in a consumer research panel. The figures released Tuesday include responses from at least 2,500 households. The figures for October were revised after all the surveys were tabulated.

Economists closely track consumer confidence because consumer spending accounts for two-thirds of U.S. economic activity.

The overall rise in confidence reflects an increase in the Conference Board's index measuring consumers' appraisal of current economic conditions. That measure, the Present Situations index, surged to 80.1 from 67.0 last month.

An index measuring consumers' expectations for the near future also rose, from 91.5 to 99.4. Those expecting business conditions to improve over the short term rose to 24.1 percent from 23.5 percent.

But consumers continue to harbor some doubts about the job market. Those anticipating more jobs to become available in the next six months dipped to 18.2 percent from 19.6 percent.

However, the number expecting fewer jobs also decreased to 17.6 percent from 20.4 percent. The number of consumers who expect their incomes to rise during that period rose to 19.0 percent from 16.9 percent.

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