Cheaper fuel boosts US shoppers

The mood amongst US consumers is improving

US consumer confidence leapt in November, boosted by falling gasoline (petrol) prices and improved job prospects, according to a report.

The Conference Board research group said its US consumer confidence index jumped to 98.9 from 85.2 in October.

Economists had expected the closely-watched barometer of consumer attitudes to show a level closer to 90.

November's increase followed a drop in gasoline prices, which had soared in the wake of Hurricane Katrina.

Holiday season

The shock of the hurricanes and subsequent leap in gas prices has begun wearing off just in time for the holiday season Lynn Franco, Conference Board

Katrina damaged a number of major oil refineries along the US Gulf coast when it struck at the end of August.

In the immediate aftermath of the hurricane, global oil prices hit record highs.

"A decline of more than 40 cents (a gallon) in gasoline prices this month and the improving job outlook have combined to help restore consumers' confidence," said Lynn Franco, director of the Conference Board consumer research centre.

The better-than-expected consumer confidence data for November followed two months of declines for the index, and came ahead of the key Christmas shopping season.

"While the index remains below its pre-Katrina levels, the shock of the hurricanes and subsequent leap in gas prices has begun wearing off just in time for the holiday season," Ms Franco said.

"Despite this latest boost in confidence, holiday spending will be driven by the bargains consumers have come to expect."