Consumer confidence up in December, nearing post-recession high

Consumer confidence jumped in December and is pushing toward a post-recession high, though Americans still don’t seem to think the economy is healthy.

A monthly index from the Conference Board shows consumer confidence at 64.5, up nearly 10 points from a revised 55.2 in November, itself a 15-point boost from October.

That’s the highest level since April, when the index hit the 66 mark, though still below the 90 level that economists consider the threshold for a stable economy. The index hit 72 in February, its highest point since the recession.

More people believe that business conditions are good -- 16.6% compared with 13.9% the previous month. And fewer consumers -- 41.8% compared with 43% in November -- think that jobs are hard to find. A higher percentage of respondents also said that conditions for business and jobs will keep looking up during the next six months.

The December improvement could signal better times to come because consumer spending makes up about 70% of U.S. economic activity. Another key measure last week from Thomson Reuters/University of Michigan also found consumers feeling more positive, with 29% expecting good economic times ahead compared with 19% in November.

But Lynn Franco, director of the Conference Board’s research center, warned that the boost could have also come from temporary holiday cheer.

“While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes," Franco said in a statement.

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-- Tiffany Hsu

Photo: Shoppers scout for post-Christmas bargains Monday at a Target store in Abilene, Texas. Credit: Joy Lewis / Abilene Reporter-News

A good start for a Santa Claus rally

Although Christmas has come and gone, investors are still waiting to see if Santa comes for a visit -- and the first signs are promising.

A Santa Claus rally is often used roughly to refer to any stock rally in late December, but it is defined by the Stock Traders Almanac, which first identified the phenomenon, as a rise in stock prices during the last five days of the trading year and the first two days of the new one.

The almanac notes that this has happened in all but 10 years since 1969. It's significance is not just as a overused catch phrase for journalists: It has frequently been a good predictor of the market's performance in January and the year ahead. As the almanac has put it, "If Santa Claus should fail to call, bears may come to Broad and Wall."

This year, the market is off to a good start. Last Friday was the first day of the Santa rally period. The Standard & Poor's 500 index rose 0.9% and entered positive territory for the year.

This morning, stocks have wobbled, with the Dow Jones industrial average and the S&P 500 trading almost unchanged as investors process news that home prices were down in the latest Standard & Poor's/Case-Shiller report, while consumer confidence is up.

The markets' performance this week is likely to determine whether the S&P 500 ends the year in positive or negative territory for the year. Despite all the violent market movement this year, the index is likely to show the smallest yearly change since 1970, according to Bloomberg.

With stock trading expected to be light this week, much attention will likely be focused on the obligatory year-ahead predictions. To get started, here's one look at what the optimists are saying, and one from a commentator who is waiting for the Apocalypse.

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-- Nathaniel Popper in New York
twitter.com/nathanielpopper

Photo credit: Michael Nagle / Getty Images

Consumer Confidential: Prices come down, shoplifting goes up

Here's your Happy-Festivus Friday roundup of consumer news from around the Web:

-- And down they come -- prices, that is. Half off at the entire store at Ann Taylor. Sixty percent at Gap. Forty percent off almost everything at Abercrombie & Fitch. Aggressive last-minute deals in the days before Christmas are good for procrastinators, but they could be an alarm bell for the retail industry. While scattered markdowns are standard every year, discounts across entire stores -- which analysts say are more widespread than last year -- suggest merchants are stuck with too much merchandise. Many retailers entered the season with fully loaded shelves. Now they're scrambling to move inventory. Among the deals to be had, Toys R Us announced new markdowns on dozens of items for Friday and Saturday. (New York Times)

-- But apparently not all shopping is paid for. During the four weeks leading up to Christmas, an estimated $1.8 billion in merchandise will be shoplifted this year, according to the Global Retail Theft Barometer, a survey of retailers worldwide. That's up about 6% from $1.7 billion during the same period last year. Sticky fingers are common during the holidays. The crowded stores and harried clerks make it easier to slip a tablet computer into a purse or stuff a sweater under a coat undetected. But higher joblessness and falling wages have contributed to an even bigger rise this year. People steal everything from necessities to luxuries they can no longer afford. (Associated Press)

-- And if you're going to be returning anything (paid for or otherwise), keep in mind that there are rules to follow. Some items -- especially electronics -- have a shorter return window. Target has shortened its return time for tablets, netbooks, e-readers, cameras and camcorders to 45 days, down from 90 days last year. Also, shoppers who return gifts without receipts or other proof of payment may end up receiving the current selling price of the item, which may be lower than what was paid. In other cases, the retailer may decline the return all together. Retailers estimate that holiday returns will total a record $46.3 billion this year, up 4% from last year and 10% from two years ago. (SmartMoney)

-- David Lazarus

Photo: Discounts are growing as retailers scramble to move inventory. Credit: Scott Eells / Bloomberg

 

UPS delivering 26 million parcels Thursday; viral FedEx video

The brown-suited elves at UPS will be busier Thursday than they have been all year, with nearly 26 million items set to reach their destinations, according to the parcel shipping company.

That’s roughly 300 deliveries a second, up 60% from UPS’ normal daily average. During the rest of the week — the busiest of the year for the company — employees will transport nearly 25 million packages a day.

In the few days before Christmas, the total number of deliveries will reach 120 million this year, up from the 113 million sent this time last year. To make it happen, UPS will add more than 400 extra flights each day and hire nearly 24,000 seasonal employees.

On Tuesday, UPS handled 58 million online tracking requests. On Thursday, workers will process 3 million express shipments through the company’s Louisville Worldport facility.

Workers are also frantic at the U.S. Postal Service and at FedEx. The Postal Service said this week will also be its busiest of the year, with 600 million cards and letters on Tuesday alone. FedEx had its most frantic day ever on Dec. 12, when it dealt with 17 million packages.

At least one of them wasn’t delivered in the most delicate fashion. In a YouTube video that has gone viral this week, a FedEx delivery man is shown hurling a packaged computer monitor over a fence without ringing the doorbell — even though the customer claims he was at home with the door open.  

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— Tiffany Hsu

Photo: Tim Boyle / Bloomberg

Consumer Confidential: Risky massage, Motrin recall, burger wars

Here's your thunder-island Thursday roundup of consumer news from around the Web:

-- We all want a massage to die for ... but not literally. The Food and Drug Administration is warning consumers not to use the ShoulderFlex Massager because at least one person is reported to have died from strangulation while using the device. The massager is sold in retail stores, catalogs and online. It's intended to provide a deep tissue massage to the neck, shoulders and back area while lying down. But the FDA warns that hair, clothing or jewelry can become entangled in the device and cause serious injury or even death from strangulation. There have been reports of one death and one near-death due to strangulation. (ConsumerAffairs.com)

-- Another heads up: Johnson & Johnson has issued another recall of Motrin pain relievers -- the sixth in two years. This time, it's because Motrin IB pills may not dissolve and begin working as fast as they're supposed to as they approach their three-year expiration date. That could delay relief of pain. The recall covers Motrin IB coated caplets and coated tablets, in packages with either 24 pills or 30 pills. A company spokeswoman says J&J is recalling packages only from retailers, not consumers, because there's no safety concern. If you have questions, call J&J at (888) 222-6036. (Associated Press)

--Who rules Burger Land? Well, McDonald's is still top dog, but the battle for second place is heating up. Wendy’s is poised to pass Burger King in market share sometime next year, according to market analysts. It would be the first time that Wendy’s, which was founded in 1969, has reached the No. 2 spot. Burger King, which once held about 20% of the $65 billion hamburger market, fell to 13.3% last year and could soon dip below 10%. Wendy’s, meanwhile, has focused on taste, offering thicker burgers with buttered buns while reminding customers of its glory days with a remake of its 1984 "Where’s the beef?" commercials. (Financial Times)

-- David Lazarus

Photo: This is a good massage. But the FDA says you could get strangled if you use a ShoulderFlex massager. Credit: Jay L. Clendenin / Los Angeles Times

 

American dissatisfaction with nation's outlook near record highs

Americans in 2011 were more dissatisfied with the way things are going in the country than they’ve been in the past 30 years — with one exception.

That was 2008, during the recession, when just 15% of people polled by Gallup said they were happy with national conditions. This year, 17% of respondents on average were pleased with what they saw on the national landscape.

Most blamed high unemployment, the federal budget deficit, rising poverty or some other economic issue as the root of their malaise. Others pointed to evidence of moral decline, health-care woes and a government that they claim is not up to snuff.  

Throughout the year, satisfaction ranged from a high of 26% in May after the U.S. military killed Osama bin Laden to lows of 11% in August and September after Standard & Poor’s downgraded the U.S. debt rating.

The single lowest percentage ever of happy Americans came in October 2008, when the pressures of the financial downturn kept all but 7% of people polled from feeling satisfied. Since Gallup first started asking about the issue in 1979, satisfaction levels have been as high as 60%.

Though a key measure of consumer confidence from Thomson Reuters and the University of Michigan saw an uptick in December for the fourth straight month, data also continued to show historically low numbers of people expecting good economic times ahead.

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— Tiffany Hsu

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Key consumer confidence index up for fourth straight month

This post has been corrected. See note at the bottom for details.

A leading consumer confidence index rose in December, the fourth straight monthly increase, but the stalemate in Washington over extending the payroll tax cut could cut into those gains.

Consumers were much more positive about the overall economic prospects this month compared to November, according to the latest Thomson Reuters/University of Michigan Survey of Consumers released Thursday. The percentage of respondents expecting good economic times ahead increased to 29% from 19% in November, though the figure was still historically low.

The boost in consumer confidence, combined with a continued drop in weekly jobless claims Thursday, helped investors overcome disappointment in a downward revision to third-quarter economic growth data. The Dow Jones industrial average was up about 34 points in early trading.

The survey's broader consumer confidence index was at 69.9 in December, up from 64.1 in November and a sharp increase from the 55.7 level in August. The index was at 74.5 last December.

Still, most consumers said 2011 was a bad year. A majority reported that their personal financial condition was worse this year, and only about a quarter anticipated things would improve in 2012. 

"Given the continued weakness in consumers’ assessments of their personal finances, the congressional stalemate on extending the payroll tax holiday could easily reverse the recent gains," Richard Curtin, the survey's chief economist, said of the tax break that will expire on Dec. 31 unless lawmakers pass an extension. "If the payroll tax holiday is not extended, it would be a significant drag on economic growth, and would increase the likelihood that weakness in consumer spending would again put the economy at risk of a renewed downturn."

"Even a month-long delay would heighten uncertainty and cause consumers to begin to take precautionary actions," Curtin warned.

[For the record, 10:06 a.m.: An earlier version of this post incorrectly said the consumer confidence survey and the jobless-claim data were released Friday.]

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-- Jim Puzzanghera in Washington

Photo: Holiday shoppers in New York City on Wednesday. Credit: Bloomberg

Nannies, other service providers tipped up to $425 for holidays

Nannies and other service professionals may be scoring hefty tips this holiday season, according to a survey of Zagat readers.

The vast majority -- 79% -- of respondents said they’ll be tipping the same amount as they did last year. And gardeners, teachers, hairdressers and other service providers will be getting re-gifted items from 45% of of tipping customers.

But 15% of respondents plan to tip more –- and mostly in cash instead of through gift certificates, bottles of wine or baked goods, according to Zagat.

They plan to parcel out $425 each to their nannies and $139 to housekeepers and maids. Building managers will get $97 while gardeners will be tipped $82, according to the poll.

Child day-care workers will get $79, doormen $74. Pet care providers such as dog walkers will earn $62 on average while handymen will land $58, hairdressers and stylists will receive $44 and schoolteachers will be gifted $42.

Service providers getting less than $30 in tips: garbage collectors, barbers, newspaper delivery workers and postal employees, according to Zagat. 

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-- Tiffany Hsu

Photo: Will Mrs. Doubtfire and fellow nannies get hefty tips this holiday season? Credit: Arthur Grace

Consumer Confidential: Holiday shopping, fewer fliers, gas pains

Here's your last-train-to-Clarksville Tuesday roundup of consumer news from around the Web:

--We're still shopping, right down to the wire. Sales at stores opened at least a year rose 3.4% for the week ended Saturday compared with the previous week, according to the International Council of Shopping Centers-Goldman Sachs Weekly Chain Store Sales Index. That follows two consecutive weekly declines as shoppers took a break after a discount-fueled spending spree over the Thanksgiving weekend. Compared with a year ago, sales for the week rose 4.6%. And there's still more shopping to do. According to a poll of 1,000 shoppers conducted by ICSC and Goldman Sachs, shoppers on average completed 70% of their holiday buying as of Sunday. Moreover, 9% of shoppers polled hadn't even started their holiday buying. Man, talk about procrastinators. (Associated Press)

--And we're still traveling, but not quite as much. The estimate for the upcoming winter holiday travel period predicts there will be fewer fliers than a year ago. A projected 43.3 million air travelers will fly on U.S. carriers for both domestic and international routes during a 21-day period, according to Airlines for America, the industry trade organization for the leading U.S. airlines. That's a 1% drop from the same period last year, which translates to about 20,000 fewer passengers on average per day. However, travelers will not find that translates into more leg room once they board planes. On the busiest days, flights will be filled to at least 85% capacity, according to the forecast. (CNN)

--Feeling a bite out of your earnings? That's your gasoline bill talking. Despite the fact that gas prices have been falling in recent weeks, the fact is consumers have spent more money on gas this year than any other, according to the Oil Price Information Service. As of mid-December, gas prices have averaged $3.52 per gallon. Based on recent demand trends, the total consumers will have spent on gas this year should be about $481 billion. Last year, motorists spent a total of $389 billion on gas, according to OPIS. When all of this data is broken down, each American household will have spent an average of $4,155 on gasoline 2011, approximately 8.4% of an average family's income. Ouch. (ConsumerAffairs.com)

-- David Lazarus

Photo: Polls show Americans still have plenty of holiday shopping to do. Credit: Mark Boster / Los Angeles Times

 

Consumer Confidential: Saab's woes, Nissan recalls, bearish penalty

Here's your ain't-no-mountain-high-enough Monday roundup of consumer news from around the Web:

--Sayonara, Saab? Saab Automobile has filed for bankruptcy, bringing the Swedish carmaker to the brink of shutting for good after failing to find investors to rescue the 74-year-old company. Saab, which General Motors sold to Swedish Automobile in February 2010, won protection from creditors in September and has been seeking funding since then. Guy Lofalk, Saab's court-appointed administrator, applied on Dec. 7 to end the reorganization, saying the carmaker was out of money and had no realistic hope of gaining financing soon. Swedish Automobile's stock plunged as much as 76% to 5 cents. How do you say "fare thee well" in Swedish? (Los Angeles Times)

--Speaking of vehicles, heads up: Nissan is recalling some 2010 and 2011 models of its Sentra small car for a battery-related problem -- the second time in a month it has recalled the cars for a battery issue. And it's recalling its Juke small car because a bracket could break and cause the engine to stall. The latest recall involves Sentras built from May 11 through May 22, 2010, and from July 8 through Oct. 25, 2010. A zinc coating on a bolt that holds the battery cable is too thick and can reduce voltage, resulting in hard starting and damage to the engine control module. As a result, the engine could stall and be hard or impossible to restart. (USA Today)

--The bear necessities: The people who make the Build-A-Bear toy bears have agreed to pay a $600,000 penalty for failing to report a safety defect that resulted in injuries to consumers. The penalty results from the company's alleged failure to immediately report problems involving a toy bear beach chair. The Consumer Product Safety Commission said sharp edges of the chair's folding frame could pinch, lacerate and even amputate a child's fingertip. The chairs were recalled in May 2009, by which time there were at least 10 reports of injuries, which the St. Louis-based company apparently knew about but didn't report. In agreeing to the settlement, Build-A-Bear said it denies allegations about the existence of a defect or hazard, or that it violated the law. (ConsumerAffairs.com)

-- David Lazarus

Photo: Saab may be going bye-bye after filing for bankruptcy. Credit: Eric J. Shelton / Associated Press

Muted company holiday parties, low-cost personal shindigs for 2011

Company parties are still trying to pull themselves out of the recession doldrums, but personal, private parties are having an easier time picking up.

Champagne and sparkling wine purveyor Korbel said it expects to ship more than 16 million bottles around the holidays, up 5% from 2009. Hosts are inviting more guests — 36 on average this year compared with 33 last year, according to Evite.

Sherman Oaks social media strategist Nick Walsh, 26, is nearing fete fatigue with at least five holiday parties this month.

There was the white elephant bash, where he was given a guido survival kit complete with pasta, tanning oil and Axe body spray. There’s an upcoming ugly sweater party and a party bus event. His office is hosting one shindig. One weekend, he had so many parties lined up that he began mixing up dates and locations.

With more events than ever to go to this year, Walsh has started strategically mapping them out so that he doesn’t double up on seeing the same people.

“I’m a really big Christmas guy in general, but I’ve had my fill,” he said. “I’m constantly declining Facebook invites now because I’ve had so many. Everybody has a Christmas party these days.”

But many of the festivities are decidedly low-rent. Participants in white elephant parties have been getting low-budget (or no-budget) gifts such as used ashtrays, wilted carrots and broken umbrellas, according to a survey from the Creative Group.

Sales at the online Ugly Sweater Shoppe, which sells the unattractive duds for tongue-in-cheek winter bashes, are on track to double sales from last year. Pullovers featuring Santas, snowmen or Christmas trees -– including one called the Rockafeller -– are set to be bestsellers, owners said.

UglyChristmasSweaterParty.com launched out of a loft in 2009 with $35,000 in sales before moving to a basement in 2010 and raking in $70,000. This year the company has moved into a warehouse and is expecting more than a quarter of a million dollars in revenue.

“The flashier they are, the quicker they sell off the shelves,” co-owner Adam Paulson said. “A lot of people are still on a budget, so instead of having a black-tie event, they’re using sweaters to have a good time on the cheap.”

Of course, all is not dark and dreary for corporate shindigs. Conde Nast, publisher of Vogue, the New Yorker and other tony magazines, is returning its holiday luncheon to the upscale Four Seasons hotel in New York this year after canceling it in 2008 and then briefly reviving it as a muted cocktail hour.

Party planners are setting up events at bowling alleys, at the Getty Center, on Newport Beach boats and even at the Metodo Rossano Ferretti hair salon and spa in Beverly Hills.

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-- Tiffany Hsu

Photo: Production assistants Byron Escobar, left, and Eddy Robles load a sleigh onto a truck for a holiday party at Bob Gail Special Events in Los Angeles on Dec. 8. Credit: Christina House / For The Times