Consumer Confidence hit a five-year high prior before the Labor Departments official release of October’s 7.9% Unemployment number today.
The Conference Board's consumer confidence index rose to 72.2 last month. That's the highest reading since February 2008. While the index is still below the 90 reading consistent with a healthy economy, it has risen from a reading of 40.9 a year ago. That's the biggest one-year increase since 1994, Robert Kavcic, an economist at BMO capital markets said.
On Thursday the ADP National Employment Report estimated private-sector employers added 158,000 jobs in October. From ADP’s analysis, October’s Unemployment rate was expected to tick up to 7.9%. Additionally prior to leasing October’s Unemployment report, the Labor Department said initial jobless claims fell to 363,000 last week, down from 372,000 the prior week and smaller than the consensus estimate of 369,000.
The Commerce Department said on Tuesday, home prices, which declined rapidly in 2006 and contributed to the country's recession, are edging up and helping spur economic growth. Improvements in the housing market are also boosting consumer confidence, as record low borrowing rates make buying more affordable.
U.S. single-family home prices rose 0.5 percent in August on a seasonally adjusted basis, marking the seventh straight month of increases, according to the S&P/Case Shiller composite index of 20 metropolitan areas released on Tuesday.
Sales in retail stores open at least one year rose 5% in October, according to a tally from 21 retail chains by the International Council of Shopping Centers. That was better than analysts expected. Some of that increase may reflect higher spending for generators, batteries, water and other supplies in preparation for Superstorm Sandy.
Consumers base their view of the economy on what they can understand, a reduced sense of fear concerning employment, housing prices beginning to rise, retail sales picking up and reports factories orders are improving.
Consumers don’t sweat the small stuff. They don’t care that the majority of jobs growth over the past few months relates to campaign workers hired or an expansion in part-time retail positions. They tend to ignore the fact, the lower mortgage rates drop, and the faster housing prices stabilize if not begin to rise.
They don’t have the time to read the manufacturing report to find out it included basically double the prior quarters orders for defense purchases increased to a level last observed prior to the Afghanistan surge three years ago.
They are naïve to the fact that an increase in same store sales year to year when you are comparing those numbers to a poor 2011 showing isn’t encouraging. They really don’t give a dam about 3rd quarter earnings or future sales predictions from America’s corporations who they believe betrayed them.
Ignorance is bliss and maybe that is what American Consumers need more of. American consumers can’t solve record high unemployment across Europe. Main Street certainly isn’t going to reboot China’s export based economy. Mr. and Mrs. USA can’t mitigate the fiscal cliff from occurring.
What America truly needs to jump start this recovery out of its sluggish 2% growth is Consumer Confidence better times are truly in our future. What America truly needs is for business owners to have the investment confidence to make capital purchasing decision leading to new full-time hiring.
While knowledge may be power perhaps ignorance leads to bliss.