US Consumers enter the Holiday season upbeat - Wells Fargo
Consumer confidence surged to the highest level in 17 years, at 129.5 in November, while Consensus was expecting a slight decline for the month, mentioned analysts from Wells Fargo.
“According to the Conference Board’s Consumer Confidence Index, American consumers are heading into this year’s holiday season with the highest confidence in 17 years. We have to go back to November of 2000 to see a higher consumer confidence level and this is no small feat. However, what is even better today is that consumer confidence back in November 2000 was actually coming down, while today’s consumer confidence is still climbing. Not only is consumer confidence the highest in 17 years, it is also still improving compared to what was happening in November 2000.”
“The Present Situation Index was higher in November, up to 153.9 from a print of 152.0 in October, while the Expectations Index increased from 109.0 in October to 113.3 in November. According to the Conference Board’s report, one of the biggest drivers of consumers’ expectations was the improvement in the labor market.”
“While consumer confidence has continued to improve and income expectations have followed through, disposable income growth has remained muted over the last year or so. Thus, consumers will have to continue to bring down the saving rate, as they have done for more than a year, and/or they will have to demand more credit to make this holiday season as merry as what the consumer confidence index has been indicating. Since, as we pointed out above, we are still in the upswing phase of consumer confidence, the probability that consumers will act on this higher confidence is high today.”