–Consumer Confidence Getting Help From Stock Mkt, Elections And Housing

By Ian McKendry

WASHINGTON (MNI) – Early indications in October are that consumer
confidence is gaining momentum as Americans become more optimistic about
the future due to the upcoming elections, a strong performance by the
stock market and rising home prices.

The Investor Business Daily/Techno Metrica Market Intelligence
consumer confidence index reached a 71-month high in October rising by
2.2 points or 4.2% to 54.0, and is 13.0% above its 12-month average of
47.6.

The increase in the IBD/TIPP index follows a 13.6% increase in
September and similar gains in the University of Michigan Consumer
Sentiment survey which showed that consumer sentiment rose 5.4% in
September and the Conference Board Consumer Confidence index which rose
14.7%. All three measures of consumers feelings about the economic
climate posted strong gains in consumers expectations for the future.

“Confidence showed an unusual jump despite high gasoline prices and
high unemployment,” Raghavan Mayur, president of TIPP, a unit of
TechnoMetrica Market Intelligence, IBD’s polling partner said in a
statement Tuesday.

Mayur said that “Democrats’ continued upbeat sentiment and recent
stock market performance contribute to the optimism.” Terry Jones,
associate editor of Investor’s Business Daily said in a statement
accompanying Mayur’s that Republicans confidence might be buoyed by GOP
nominee Mitt Romney’s performance in the presidential debates.

During the last presidential elections, confidence actually fell
10.3% in October, but that was post Lehman Brothers collapse which
happened during mid-September. The index received an election bump of
23.6% in November rising to 50.8 which is still 5.9% below this
October’s reading.

The S&P 500 is up roughly 1.7% over the last month according to
Yahoo Finance and measures of home prices such as the Case-Shiller Home
Price Index and the CoreLogic Home Price index are indicating that home
prices are on the rise. Consumers feelings about the economy are also
likely to receive a boost from Friday’s jobs report which said that the
unemployment rate fell below 8% for the first time since January 2009.

** MNI Washington Bureau: 202-371-2121 **

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