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December 7, 2012

Americans in mood to spend at start of holiday

(Continued)

WASHINGTON —

In a sign of resilience in parts of Europe, German factory orders jumped 3.9 percent in October, the most since January 2011, on gains in overseas demand.

The Bloomberg comfort index's buying climate gauge improved to minus 33.4, the strongest since November 2007, from minus 35.4 the previous week. The personal finances index dropped to minus 6.6 from minus 4.4 the prior week.

The barometer measuring Americans' views on the state of the economy fell to minus 61.5 from minus 59.2 the prior period. Even so, the share of consumers giving the economy the worst rating of "poor," fell to 34 percent, the fewest in almost five years.

"Overall, consumer confidence is up but it remains fragile," David Dillon, chairman and chief executive officer of Kroger, the Cincinnati-based grocery chain, said on a Nov. 29 earnings call. "Uncertainty around issues like the fiscal cliff can have a short-term impact on consumer sentiment."

The comfort index last week was 16.5 points better than it was during this period last year. The gauge in 2012 has averaged minus 38.6 and is on track for its best annual showing in five years.

Further advances in confidence may bolster purchases. During the four-day Thanksgiving weekend, spending in stores and online rose 13 percent to $59.1 billion, according to the National Retail Federation. Last year, sales climbed 16 percent during the holiday weekend.

Online holiday sales climbed 14 percent from Nov. 1 through Dec. 2 from the same period last year, according to comScore. The gain was propelled by Cyber Monday, which was the biggest online shopping day on record.

"Consumer confidence is soldiering on," said Gary Langer, president of Langer Research Associates in New York, which compiles the index for Bloomberg. Stagnant income advances and weak production are headwinds, while "other indicators — joblessness, the housing market and GDP among them — have improved along with consumer sentiment."

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