NEW YORK – U.S. consumer confidence improved in November as gasoline prices eased and the drag on sentiment from Hurricane Katrina abated, a report showed on Wednesday.
The University of Michigan's index of consumer sentiment recovered from a two-month slump to 81.6 this month from 74.2 in October, just above forecasts around 80.6.
"It looks like the economy is stabilizing after the hurricane-related stresses and we're heading into the holidays with an upturn in confidence that is encouraging and bodes well for good consumer spending over the next month or so," said Gary Thayer, chief economist at A.G. Edwards and Sons.
Improvements took place across the board, with the survey's current conditions component jumping to 100.2 from 91.2, while the expectations measure climbed to 69.6 from 63.2.
Confidence measures are often used as a gauge of future spending patterns, although the correlation between sentiment and retail sales is often tenuous.
Some relief to consumers has come in the form of declining gasoline prices, which fell to a 5-month low in the latest week.
The price for regular unleaded gasoline fell 9.5 cents over the last week to an average $2.20 a gallon, according to the federal Energy Information Administration's weekly survey of service stations.
Still, the drop was relative — drivers would still be paying the highest pump costs ever heading into a Thanksgiving Day holiday.
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