Despite Hurricane Sandy and the looming fiscal cliff, consumers continue to be bullish on the economy, a good sign as the crucial holiday shopping season begins.
The Conference Board Consumer Confidence Index now stands at 73.7, up from a revised 73.1 in October. This is the highest level since February 2008, as the so-called Great Recession began.
The index is a score from zero to 100, with 100 representing the go-go sentiment of 1985. The cutoff date for the data was Nov. 13.
Still, the positive trend in consumer sentiment is at risk from the fiscal-cliff.
A year ago, in the midst of a stock-market decline after the congressional debt-ceiling debacle, consumer sentiment was only 40.9.
If the fiscal cliff’s $600 billion in tax hikes and sudden spending austerity hits, consumer sentiment could rapidly evaporate. The White House warned Monday that the tax increases on the middle class would reduce consumer spending by $200 billion in 2013.
“Over the past few months, consumers have grown increasingly more upbeat about the current and expected state of the job market, and this turnaround in sentiment is helping to boost confidence,” said Lynn Franco of The Conference Board.
More consumers are more optimistic about the short-term outlook, with 22.2 percent expecting better business conditions, compared to 14.3 percent seeing them worsen.
Those anticipating more jobs rose to 20.3 percent from 19.7.