The Conference Board's consumer confidence index is up to 102.0 in November after a substantial downward revision to 99.1 in October. The November reading is not materially different from the consensus of 101.5 in the Econoday survey of forecasters. While consumers' confidence in the present situation is little changed in November from October, the index for expectations is sharply higher.

The index for present conditions is little changed at 138.2 in November from 138.6 in October. The index for expectations for six months from now is up 5.1 points to 77.8 in November from 72.7 in October.

In November, consumers were broadly more positive about present business conditions, although slightly less positive about present employment prospects. However, consumers were solidly more positive about expected personal income in six months' time, and seeing good employment prospects along with expanding business activity. Some of this may be due to steady disinflation and improving household discretionary income as energy prices decline, and hope of avoiding a recession in the near term.

The consumer confidence index is expected to fall further in November, at a consensus 101.5 versus 102.6 in October which was higher than expected but 1.7 points below September. This index remains historically depressed and has fallen for three straight months.

The Conference Board's confidence report surveys consumers on their assessments of the labor market, business activity, and their own financial conditions. The survey is conducted by Toluna, an online community platform. (Conference Board and Toluna)

The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer confidence index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.

Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.