Consumer confidence surged this month, but holiday spending could still take a hit, according to two reports released by the Conference Board yesterday.
The Consumer Confidence Index hit 91.7 in November, its highest level since September 2002. An improved employment market is the main reason the figure has rebounded from a low of 77 two months ago, the board said.
But consumers remain wary, and expect to shop less this year, another survey found. The average household plans to spend $455 on gifts, down from $483 in 2002, which could cause a 5 percent dip in retail sales.
“Consumers tend to err on the side of caution,” said Lynn Franco, director of the board’s consumer research center. Franco noted that the “present situation” confidence index stood at 80.1 – “which is obviously greatly improved, but still not a blockbuster number.”
Things could change, however, if consumers note positive economic signs in their communities, Franco said.