Americans Gloomy on Economy Heading Into Holidays

In this photo made Thursday, Oct. 15, 2009, Antionette Harris shops at a Target store in...

In this photo made Thursday, Oct. 15, 2009, Antionette Harris shops at a Target store in Philadelphia. Americans' confidence in the economy improved slightly in November, but they remain gloomy amid a weak job market heading into the holiday season. (AP Photo/Matt Rourke)

(AP)

Retailers heading into the traditional start of holiday shopping are facing consumers who are only a bit less gloomy than they were a year ago as they worry about a weak job market.

The latest snapshot from the Conference Board showed shoppers' confidence improved only slightly in November, from October, but it's stuck far below what could be considered healthy and is about half of the historic average.

The private research group said Tuesday that its Consumer Confidence Index edged up to 49.5, up from a revised reading of 48.7 in October. Economists surveyed by Thomson Reuters expected a reading of 47.7. That compares with a reading of 44.7 in November 2008, a level that sank even lower before enjoying a three-month climb from March through May. But the road has been bumpier since June as rising unemployment has taken a toll on consumers.

A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.

Last fall, "consumers were facing the fact that America was entering a deep economic hole," said C. Britt Beemer, chairman of America's Research Group, a consumer research group based in Charleston, S.C. "Now, they're in that hole."

Economists watch consumer sentiment because spending on goods and services for consumers accounts for about 70 percent of U.S. economic activity by federal measures. How consumers behave during the holidays and beyond will be key to how strongly the economy rebounds from the worst recession since the 1930s.

With holiday sales accounting for up to 40 percent of many retailers' annual sales, analysts will be dissecting shoppers' receipts to see how deal-driven shoppers are and whether they're leaning toward small-ticket items like DVDs.

Experts say depressed spending could persist for several years amid stubbornly high levels of unemployment, which is now at 10.2 percent, the highest in 26 years.

"Consumers won't be in the mood to spend for some time," Paul Dales, U.S. economist at Capital Economics Ltd., wrote in a report Tuesday.