Steady Consumer Confidence May Pay Off for Retailers --- Signs of Rising Jobless Rate Aren't Expected to Stop Holiday Shopping Sprees
WASHINGTON -- With signs that the job market is softening only a bit, consumer confidence remains high heading into the holiday shopping season, giving beleaguered retailers a reason to cheer.</br></br>The Labor Department said the number of first-time claims for jobless benefits climbed by an unexpectedly large 7,000 last week while a longer-term gauge hit its highest level in nearly two years. The numbers suggest that the jobless rate will increase in coming months.</br></br>Still, the unemployment picture has yet to take a bite out of consumer's confidence in the economy. The University of Michigan's index of consumer sentiment actually increased in November, surprising analysts expecting a decline due to stock-market weakness and continuing election uncertainty. The index finished the month at 107.6, nearly two points higher than its 105.8 level in October and only a few points below the record set in January.</br></br>The report offered a burst of good news for the nation's retailers, who have seen their stock prices battered in recent weeks amid evidence of slackening sales and dire predictions for a relatively weak holiday-shopping season. Most retailers' fortunes rest on the crowds of shoppers who flock to their stores between Thanksgiving and New Year's Day.</br></br>The new data suggest that such fears may be groundless. "With the index at these levels, it would still be reasonable to expect robust growth in consumer spending," said Ian Shepherdson, the chief economist of High Frequency Economics in Valhalla, N.Y.