The Conference Board's Consumer Confidence Index increased in November to 117.7, up from an upwardly revised 109.6 in October and higher than the 112.3 consensus in the Econoday survey of forecasters. Consumers' assessment of current business and labor market conditions-rose, as did their short-term outlook for income, business, and labor market conditions.

"November's increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market," the Conference Board said, noting that compared to last month, consumers were"substantially more optimistic" about future job availability reaching its highest level in almost three years.

"Meanwhile, consumers' expectations about future business conditions were unchanged and they were slightly less positive about future income," the report added.

The Conference Board said the share of consumers anticipating a recession over the next 12 months fell again in November to its lowest level since the question was initially asked in July 2022.

Average one-year inflation expectations declined to 4.9 percent in November from 5.3 percent in October."However, elevated prices remain top of mind: In a special question about concerns and hopes for 2025, consumers overwhelmingly selected higher prices as their top concern and lower prices as their top wish for the new year," the report said.

On a six-month moving average basis, consumers' purchasing plans for homes stalled in November, while intent to buy autos were up slightly. In addition, more consumers expressed uncertainty about future purchases."Consumers' assessments of their Family's Current Financial Situation fell slightly but optimism for their finances over the next six months reached a new high," the report said.

The consensus looks for consumer confidence to extend its remarkable recovery in November after its surprising rebound to 108.7 in October from 99.2 in September. Markets are focusing on consumer views of the job market, which improved markedly in October, now that inflation worries have diminished.

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.