Consumer Reports Index: Retail outlook up for December

Yonkers, N.Y. Despite lackluster retail numbers since August 2009, consumers have increased their retail spending markedly in November and the outlook for planned purchasing in December is strong, according to the Consumer Reports Index, December 2009 report.

The Consumer Reports Past 30-Day Retail Index (purchases made in November) has risen 24%, climbing to 11.2 from 9.0 last month. The outlook for planned purchases in the next 30 days is at 12.2, up from 9.0 the prior month, an increase of 36%. The major gains in retail spending are led by personal electronics, major electronics and small appliance purchasing.

In light of the scores for consumer sentiment, stress and consumer trouble levels, this can be best described as a reluctant rally. Consumer sentiment remains low and relatively steady over the past three months. It stands at 41.8 in December, down slightly from 42.2 in November.

"Despite the fact that the average consumer has not experienced much improvement in their financial lives in the past six months, they appear to be buying more for the holidays," said Ed Farrell, a director of the Consumer Reports National Research Center.

The Consumer Reports Employment Index is at 48.9 and remains unchanged from November's 49.0. This is reflective of a market that is still shedding jobs. During November, 7.4% reported losing their job while only 5.2% of Americans started a new job.

"The outlook is for a long, drawn-out period of discomfort for consumers. Though growth has returned to the Retail Index this month, it is possible that we will see a sharp decline below pre-holiday levels as consumers recover from their splurge, and face increased debt," Farrell said.

Regionally, the economic picture is mixed with a worsening situation in the Midwest led by a decline in the Consumer Reports Sentiment Index and increase in stress levels. Overall, the situation is unchanged in the Northeast, South, and West.

The Consumer Reports Index report, is comprised of five key indices: the Sentiment Index, the Trouble Tracker Index, Stress Index, the Retail Index, and the Employment Index.