Hip hip, hooray: Americans seem pretty darn positive right about now, according to a new survey that says consumer confidence for last month was at the highest level in almost five years. The report pegs this feeling to improving conditions in the job market, as hiring in the summer months was stronger than predicted.
The Conference Board said its consumer confidence index was at 72.2, a nice uptick from 70.3 in September and the highest it’s been since February 2008, when we were already a couple of months into the Great Recession, notes the Associated Press.
Employers added 114,000 jobs in September, which is just a modest gain, but when we’re feeling good about the job market, it gets reflected in how confident we are overall about the economy.
As we’ve said a bajillion times before, consumer spending is almost 70% of economic activity, so if we’re not worried about splashing out on products and continue to buy, employers feel better about hiring people to take care of that economic demand and then those people have money to spend. And on and on it goes.
Still with all this good news, the index is still below the magic number of 90 which is the level that indicates a healthy economy. It could be much, much worse, however — like the all-time low of 25.3 we hit in February 2009. We’ve come a long way, baby.
Consumers were “modestly more upbeat” about their finances and the outlook for the economy, said Lynn Franco, a Conference Board official. They “appear to be in better spirits approaching the holiday season,” she said.
While it remains to be seen whether we can keep up this higher level of confidence, even when the economy was weak many consumers don’t mind so much as long as it starts to improve again.
The next reading could be a bit shaken by Superstorm Sandy, as businesses were disrupted around the East Coast. Those setbacks could temporarily slow the economy down as retailers struggle to get their doors open to consumers again. So if you can go out and buy, buy, buy, do your best.