Consumer Confidence Rising In Run-Up To Holiday Shopping Season
New economic reports released Thursday suggest
that the economy remains fundamentally sound. The Conference Board reported
that its Index of Leading Economic Indicators, a measure of the economy’s
expected strength in the coming months, rose 0.8 percent in September, its best
showing since July and well above the 0.2 percent increase in August. The
figure suggests moderate economic growth in the short-term.
In addition,
Bloomberg’s Consumer Comfort Index, a weekly measure of consumer confidence,
rose to 37.7 last week, from 36.2 the prior week. The current figure matches
the highest reading for the index since August 2013. Gary Langer, whose firm
Langer Research produces the index, said that lower fuel costs combined with a
drop in layoffs are “brightening consumer views.”
While
first-time claims for jobless benefits rose 17,000 last week to 283,000, the
four-week moving average, which irons out week-to-week volatility, fell 3,000
to 281,000, its lowest level since May 2001. This means that businesses are
laying off far fewer employees than they have in recent years, a sign that the labor
market has improved.
Finally, in a
boost to the housing market, Freddie Mac reported that mortgage rates continued
their recent drop, hitting lows not seen since the summer of 2013. The average
rate of a fixed 30-year loan fell to 3.92% from 3.97% a week ago, while the
average rate for a 15-year fixed loan dropped to 3.1% from 3.18%. That may
trigger more refinancing, while also boosting consumers’ ability to purchase
homes.
What This Means For Small Business:
The
holiday season can be make-or-break time for many small businesses, and the new
data comes at an ideal time. With the start of the shopping season about a
month away, consumers have the opportunity to see the improving economic
conditions.
Additional Reading:
The AP reports on the leading indicators,
the Los
Angeles Times
reports on mortgage rates, Bloomberg
News
reports on the CCI, and a separate Bloomberg
News covers
the jobless claims data.
The
NFIB Research Foundation has collected Small Business Economic Trends
data with quarterly surveys since the 4th quarter of 1973 and monthly
surveys since 1986. Survey respondents are drawn from NFIB’s membership. Read the October 2014 Report.
This news article is intended to keep small business owners apprised of current events that may affect them. It does not necessarily reflect NFIB’s policy position on such issues.
