A day after strong "Cyber Monday" sales, a monthly survey from the Conference Board provided another hint of optimism about a recovery.
The Conference Board's consumer sentiment index rose to a reading of 54.1 for November, the highest level since June and higher than expectations for a reading of 53. The survey, which is based on a sample of 5,000 U.S. households, is often closely followed by investors and economists alike, as a gauge of consumer spending. Consumer spending makes up about two-thirds of the U.S. economy.
November's reading is "a welcome sign as we enter the holiday season," said Lynn Franco, Director of The Conference Board Consumer Research Center. "Hopefully, the improvement in consumers' mood will continue in the months ahead." October's reading was revised down to a reading of 49.9 from a previously reported 50.2.
While consumers' moods may be improving slightly, the housing market is a continued concern for many experts, and for good reason. U.S. home prices fell 0.7% in the September from August, according to the S&P/Case-Shiller home price index of 20 major cities. Prices are up 0.6% from September 2009, which was the smallest year-over-year gain since January and much smaller than the 1.7% increase seen in August.
“The national economy is certainly the number one issue for housing," said David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. “Additionally, there is a large supply of houses on the market and further, hidden, supply due to delinquent mortgages, pending foreclosures or vacant homes. New construction is running at less than half the pace needed to meet normal demand, so a sustained recovery could be a ways off.”
The oversupply to which Blitzer referred is causing the double-dip concern. "As prices go down, more people get underwater, leading people to walk away," Gary Shilling, President of investment research firm A. Gary Shilling & Co., told Reuters. Banks will end up with more write-downs, Shilling predicted, which "will be Act II in the whole drama of the housing collapse."
In September, prices fell in 18 of the 20 metropolitan areas tracked by the index; in August, only 15 metro areas saw price declines.
Tuesday, November 30, 2010
Monday, November 29, 2010
Let the shopping begin
I just made my first "Cyber Monday" purchase. I bought "Unbroken," Laura Hillenbrand's book about a 93-year-old World War II veteran, Louie Zamperini, who survived a plane crash in the Pacific and then a harrowing Japanese P.O.W. camp.
Survival has become too familiar a word for many Americans, as they wade through the recession, unemployment, a weak global economy, worries about Europe, a bailout for Ireland, not to mention terrorism and recent tensions on the Korean peninsula. But there have been a few glimmers of optimism from the consumer, a huge component of the U.S. economy, as "Black Friday" and "Cyber Monday" kicked off this year's holiday shopping season with a healthy bang.
Shares of online retailer Amazon.com (AMZN) hit an all-time high of $181.84 this morning, as people took advantage of "Cyber Monday" deals online. That follows a strong "Black Friday," which saw $648 million in online sales, according to ComScore, a 9% jump from Black Friday 2009.
Shoppers hit the stores, as well. The National Retail Federation said that 212 million people were out shopping over the weekend, an 8.7% increase from the 195 million people who braved the crowds last year. Shoppers spent more, too -- the average shopper spent $365.34 over the weekend, up from last year’s $343.31, acording to the NRF.
The numbers fit nicely with an upbeat holiday shopping forecast from The International Council of Shopping Centers. The ICSC predicts a 3% to 3.5% increase from last year, which would be the biggest year-over-year increase since 2006, before the recession began.
“The key story is that the retail recovery continues and that bodes well for the upcoming holiday shopping season,” said Michael P. Niemira, chief economist and director of research for ICSC. “Additionally, we expect holiday hiring to improve moderately over last year and overall employment growth to improve as well, which in turn should support increased spending,” Niemira added.
Dozens of retailers including Target (TGT), Wal-Mart Stores (WMT), Macy's (M) and Best Buy (BBY) have online deals today, from big discounts to free shipping. So take out your wallets and let the shopping begin . . . or continue!
Survival has become too familiar a word for many Americans, as they wade through the recession, unemployment, a weak global economy, worries about Europe, a bailout for Ireland, not to mention terrorism and recent tensions on the Korean peninsula. But there have been a few glimmers of optimism from the consumer, a huge component of the U.S. economy, as "Black Friday" and "Cyber Monday" kicked off this year's holiday shopping season with a healthy bang.
Shares of online retailer Amazon.com (AMZN) hit an all-time high of $181.84 this morning, as people took advantage of "Cyber Monday" deals online. That follows a strong "Black Friday," which saw $648 million in online sales, according to ComScore, a 9% jump from Black Friday 2009.
Shoppers hit the stores, as well. The National Retail Federation said that 212 million people were out shopping over the weekend, an 8.7% increase from the 195 million people who braved the crowds last year. Shoppers spent more, too -- the average shopper spent $365.34 over the weekend, up from last year’s $343.31, acording to the NRF.
The numbers fit nicely with an upbeat holiday shopping forecast from The International Council of Shopping Centers. The ICSC predicts a 3% to 3.5% increase from last year, which would be the biggest year-over-year increase since 2006, before the recession began.
“The key story is that the retail recovery continues and that bodes well for the upcoming holiday shopping season,” said Michael P. Niemira, chief economist and director of research for ICSC. “Additionally, we expect holiday hiring to improve moderately over last year and overall employment growth to improve as well, which in turn should support increased spending,” Niemira added.
Dozens of retailers including Target (TGT), Wal-Mart Stores (WMT), Macy's (M) and Best Buy (BBY) have online deals today, from big discounts to free shipping. So take out your wallets and let the shopping begin . . . or continue!
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