Consumers feeling rosier about the economy

@CNNMoney November 29, 2011: 2:01 PM ET

NEW YORK (CNNMoney) -- Americans seem to be feeling better about the economy going into the holiday season.

The Consumer Confidence Index shot up to 56.0 in November from 40.9 the previous month, the Conference Board reported Tuesday, the highest reading since July.

"Confidence has bounced back to levels last seen during the summer," said Lynn Franco, Director of The Conference Board Consumer Research Center in a statement.

Economists were surprised by the sudden rise, and had been expecting a more modest increase to 42.5, according to Briefing.com.

"It looks as though the U.S. consumer is tuning out what's happening in Europe, unless it comes to affect jobs here," said Mark Vitner, senior economist at Wells Fargo.

The Present Situation Index, which reflects consumers' attitude toward the current state of the economy, rose 11.2 points to 38.3 --- the largest monthly gain since June 2004.

Another bit of positive news: consumers appear to be more optimistic about the future. The Expectations Index, an outlook on the economy for the next six months, rose to 67.8 from 50.0 in October and marked the biggest jump since May 2009.

Even attitudes toward the job market seem to be perking up. Respondents claiming jobs are "plentiful" increased to 5.8 %, while those who say jobs are "hard to get" dropped to 42.1%. Those expecting growth in job market improved slightly to 12.9%, while those who anticipate an increase in their incomes rose to 14.9%.

Though Consumer Confidence is not a leading indicator of consumer's behavior, consumer spending accounts for two thirds of U.S. economy, so experts watch closely to get a sense of the economy's overall strength.

Consumers continue to unload debt

"You need to have some confidence in your own confidence and if you are confident, it will hopefully translate into your spending which is good for the U.S. economy," said Jennifer Lee, senior economist at BMO Capital Markets.

But, despite the strong sentiment, there is still plenty of skepticism around current economic conditions in the U.S. and abroad, driving concerns about the holiday shopping season.

"Although encouraging, consumer confidence remains susceptible to developments on the continuing European crisis and the domestic fiscal outlook," wrote Cooper Howes, research analyst at Barclays Capital.

Over the weekend, the National Retail Federation reported strong sales on Black Friday, an important shopping milestone traditionally viewed as a kick off to the holiday season.

Total spending over the four-day weekend was up 16% from last year, and the NRF expects retail sales to increase 2.8% during the months of November and December. To top of page

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