Consumer Confidence Rebounds in November

Gary Evans, Don Hogsett, January 2, 2006

With Americans feeling notably more buoyant after gas and home heating oil prices began to fall, consumer confidence perked up sharply, rising for a second straight month in December and improving by 5.4 percent to a level of 103.6, The Conference Board reported.

“Consumer confidence continues to bounce back and is now at its highest level since Hurricane Katrina struck the Gulf Coast,” said Lynn Franco, director of the business think tank's Consumer Research Center. “The resilience of the economy, recent declines in prices at the pump, and job growth have consumers feeling more confident at year-end than they felt at the start of 2005.”

Franco took note, however, that “all of the improvement over the past twelve months has been in consumers' assessment of current conditions,” while their expectations for the future remain muted and below earlier levels. Even so, she said, “consumers are confident that the economy will continue to expand in 2006.”

While the overall confidence number rose in December, the cheer didn't spread very far around. Indeed, the overall gain was driven by strong improvement in just three of the nine regions of the nation, the West North Central states, up 10.8 percent; the East North Central states, up 9.3 percent; and the Middle Atlantic region, up 9.3 percent.

Elsewhere, the Pacific states recorded a more modest gain of 4.3 percent, and five of the nine regions, more than half, reported declining confidence levels. The greatest decline in confidence, 16.5 percent, came out of the Mountain states.

Buying plans December
Plans to purchase over the next six months

Source: The Conference Board
Homes -6.7%
Carpets 26.7
Cars 22.0
Major appliances 2.3
Vacation -3.1

Confidence by region

Region % Change
Source: The Conference Board
New England -1.3%
Middle Atlantic 8.5
East North Central 9.3
West North Central 10.8
South Atlantic -0.3
East South Central -0.3
West South Central -5.5
Mountain -16.5
Pacific 4.3

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