New York, NY, Nov. 25--Consumer confidence surged to its highest level in over a year, exceeding economists' rosy expectations, as consumers grew more hopeful about the job market, a report said Tuesday.
The Conference Board said its index of consumer confidence climbed to 91.7, its highest level since September 2002, from a revised 81.7 in October. Wall Street analysts had forecast a rise to 85.0.
But the sunnier mood among consumers will not necessarily translate to strong spending over the holiday season, because consumer confidence has not been a reliable indicator of consumer spending in recent years.
Tentative signs of improvement in the job market have been a key driver of strengthening confidence, even as the economy has boomed in the past few months.
"Consumers believe a slow but sure labor market turnaround is under way," said Lynn Franco, director of consumer research at the Conference Board.
The percentage of consumers saying that jobs were hard to get fell to 29.5 percent in November from 33.7 percent the previous month. Consumers' views of the future grew rosier, lifting the expectations component of the index to 99.4 in Nov. from 91.5. The present situation index rose to 80.1 from 67.0.
Other reports are also showing early signs of recovery in the job market. Applications for unemployment benefits have been averaging less than 370,000 a week, the lowest since February 2001. More than a quarter of a million jobs were added to U.S. payrolls in September and October.
But even with the economy's brighter prospects gradually leading to more jobs, consumers may not be rushing into stores during the holidays. Some retailers have recently sounded cautious notes about the upcoming spending season.
Wal-Mart, the world's biggest company by revenues, told analysts this month that consumer spending over the holiday season will likely be better this year, but only because last year's sales were so lackluster.
"I don't think consumer spending is slowing, but I also don't see the strength that many of you in the investment community appear to see," said Wal-Mart Chief Executive Officer Lee Scott.
