Consumers providing mixed holiday signals

By David Gill -- Home Textiles Today, 12/4/2000

NEW YORK -Consumer confidence in November proved to be a stew which mixed feelings of current prosperity with uncertainties about the future.

The consumer confidence index, The Conference Board's monthly indicator of consumer sentiment, slipped 2.3 points from October to November, to 133.5-its lowest level since October 1999. Yet there was a clear, two-sided picture portrayed by the November findings in The Conference Board's monthly survey.

Looking at the two major components of the index, the 5,000 respondents to the survey evinced a positive, sunny glow. The present situations index hopped from 176.8 in October to 178.7. Certainly, shoppers laying siege to the malls during the Thanksgiving weekend showed no signs of economic worries; the National Retail Federation said its quick survey of store traffic showed a 6.5 percent increase in shoppers during "Black Friday" and the two days after that.

Lynn Franco, director of The Conference Board's consumer research center, said that "confidence in current economic conditions points to strong holiday spending ahead."

The dark side of the consumer moon was seen in the board's expectations index, which dropped five points in November, finishing at 103.4.

Commenting on the two negatives, Franco said, "The dip in expectations may reflect concern about the still-unresolved presidential election. The nine-point drop in consumer confidence over the last two months underscores an anxiety about future economic conditions."

David Orr, chief economist for First Union Economics Research Group, agreed but added, "We come back to the fact that so long as the job market is good, consumers will not pull in their horns very much." He said fewer survey respondents felt jobs were "hard to get," whereas slightly more respondents rated jobs as "plentiful."

Noting that all three indicators-overall confidence, present situations, expectations-were well off their highs for the year, Michael Niemira, vp of the Bank of Tokyo Mitsubishi, said, "Clearly, the consumer confidence readings still remain high historically."

The Conference Board reported in another survey that U.S. households would spend an average of $490 on gifts this coming holiday, compared with the $495 household average for holidays 1999.