Consumer Confidence and Spending Up

December 28, 2011

Consumer confidence hit an eight-month high this month and that helped boost online holiday sales to a new record high.

According to The Conference Board, consumer sentiment rose from 55.2 in November to 64.5 in December.

Economists had predicted an increase to just around 58.0.

The Present Situation Index jumped from 38.3 to 46.7, the highest mark since September 2008, and the Expectations Index increased from 66.4 to 76.4.

“Consumers’ assessment of current business and labor market conditions improved again,” said Lynn Franco, Director of The Conference Board Consumer Research Center. “Looking ahead, consumers are more optimistic that business conditions, employment prospects, and their financial situations will continue to get better.

gift on a computer“While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes.”

Regardless, the economy benefited from the increase in confidence this holiday season as U.S. consumers spent more than $35.3 billion shopping online over the last two months, an increase of 15 percent from a year ago.

According to comScore, online spending totaled $35.27 billion from Nov. 1 through Dec. 26, up from $30.59 billion during 2010. The most recent week, which ended Dec. 25, saw $2.8 billion in spending, an increase of 16 percent over the same time last year.

“Holiday e-commerce spending has remained strong throughout the season, and we have now reached a record $35 billion in U.S. online sales for the season-to-date,” said comScore chairman Gian Fulgoni. “We can now say with certainty that the $1.25 billion spent on Cyber Monday will rank it as the heaviest online spending day of the season for the second consecutive year, but we should also note that it was accompanied by nine other billion dollar spending days this year.”

Experts are also predicting that consumers will return more gifts this year than ever before. But that’s another story. Let’s enjoy the positive economic stimulation for now.

Categories: Economy

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