Consumer confidence reaches highest level in a year

Consumers are increasingly bullish on the economy, a good sign as the crucial holiday shopping season approaches, and for President Obama’s reelection chances next week. 

The Conference Board Consumer Confidence Index now stands at 72.2, up from a revised 68.4 in September. 

The index is a score from zero to 100, with 100 representing the go-go sentiment of 1985. 

Consumer sentiment dipped to 61.3 in August, down from 65.4. A year ago, in the midst of a stock-market decline after the congressional debt-ceiling debacle, consumer sentiment was only 40.9.

The major problem for the U.S. economy is weak demand, and rising confidence should translate into greater retail spending. Of course, the disruptions of Hurricane Sandy and the looming fiscal cliff have not yet been taken into account. The cutoff date for the preliminary results was Oct. 18. 

Assessments of the future led the increase. Asked about the current situation, consumers gave a 56.2 grade, up from 48.7. Asked about expectations for future recovery, the number rose to 82.9 from 81.5 last month. 

“Consumers were considerably more positive in their assessment of current conditions, with improvements in the job market as the major driver,” said Lynn Franco of The Conference Board.