Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=211596
Story Retrieval Date: 3/8/2014 9:56:47 PM CST
Century Pens, a luxury pen shop, is expecting record holiday sales this year.
Chicago consumers are feeling more confident about opening their wallets this month.
Consumer confidence reaches four-year high just in time for holiday spending
Consumers are feeling more secure with their economic situations than they have in the past four-and-a-half years, according to a survey by the Conference Board at Nielsen.
The increase was aided by a better outlook for hiring and job creation. Employers added 171,000 jobs in October and more jobs were created in August and September than originally thought, the government reported.
Slightly more than 20 percent of those surveyed said they believe that more jobs will be created in the coming months. That was up from 19.7 percent last month. Even more consumers – 22.2 percent - felt that job conditions will improve in the coming months. Those who expect job conditions to worsen declined by nearly 1 percent to 14.3 percent.
The Consumer Confidence Survey polled approximately 5,000 households during the first half of the month. The survey asks people how they feel about the economy and job markets currently, as well as how they feel about the future. November marked a 1 percent increase in confidence from an upwardly revised October reading.
Confidence levels in November reached 73.7, the best reading since February 2008. Results beat the 73.0 expectation of analysts surveyed by Bloomberg.
While the index is still below 90, the level that is consistent with a healthy economy, November marks the closest Americans have felt to healthy levels in nearly five years. It last reached 90 in December 2007.
Consumer confidence has nearly tripled since its all-time low of 25.3 in February 2009. Analysts believe it will continue to rise.
“We're seeing some strengthening here in all of these indicators,” said Ray Stone, an economist at Stone & McCarthy Research Associates.. “It makes me feel better about the sustainability of the recent expansion….It will be sustained in the quarters and years ahead. We're inching ahead.”
With consumer spending comprising nearly 70 percent of economic activity in the U.S., higher confidence levels should translate into increased holiday spending.
“The recent gains in Consumer Confidence provide some evidence that households are feeling better both about current economic circumstances, as well as the prospect for future conditions,” Stone said. “This bodes well for holiday shopping and continued expansion.”
Online spending on Black Friday, the kickoff to the holiday shopping season, rose 26 percent from last year to $1.04 billion from $816 million. It was the first time ever that Black Friday e-commerce sales topped $1 billion. Total sales for Black Friday rose 14 percent to $59.1 billion with a record 247 million shoppers partaking in the sales extravaganza. Cyber Monday sales came in 20 percent higher than last year, bringing in an estimated $1.5 billion.
However, Chicagoans’ feelings are not necessarily echoing those upbeat results. “I think I’m spending less this year because I guess I’m being more cautious,” said Ruby Johnson, a Chicago resident.
Sarah Hanford works downtown and says she isn’t feeling different from last year. “I wouldn’t say that I feel more or less confident but I feel like I’ve sensed that the general public feels more,” she said. “But for me, no big changes.”
But Ed Hamilton, owner of Century Pens, an upscale pen shop on South LaSalle Street, said he is poised for his best Christmas season ever and is thankful for increased consumer confidence. “Sales are up year over year for me,” he said. “It is a little early to say this will be my best year financially, but holiday shopping this year is already way up from last year and I am expecting a big boom around Dec. 15 when people start scrambling.”