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Subject: Consumer Confidence, Goods Orders Rise; Growing Optimism Linked to Clinton's
Date: Wed, 25 Nov 92 04:45:04 EST
Message-ID: <6.1992Nov25.044505@AmeriCast.com>
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Consumer Confidence, Goods Orders Rise; Growing Optimism Linked
to Clinton's Win; Stock Market Surges<By Jay Mathews=Washington
Post Staff Writer=

 NEW YORK, Nov. 24 - A delayed cheer for Bill Clinton's electoral
victory rippled through the economy like a wave at a football
stadium today, creating a surge in consumer confidence and giving
a boost to the stock market.

 Orders for durable goods also were up a surprising 3.9 percent
for October, although economists warned that a clump of automo-
bile and aircraft orders might have skewed the figure.

 It's far from certain that the economic upturn promised by
President Bush during the election campaign is underway, and
today's good news comes too late to help his cause.

 Consumer confidence as measured by a survey of more than 3,000
families conducted by the Conference Board's Consumer Research
Center jumped to 65.5 in November from 54.6 in October. Most
analysts attributed the increase to delight among Clinton voters
over the Nov.  3 election results.

 "It's a huge jump and certainly bodes well for the future if it
can be sustained," said Allen Sinai, chief economist for the Bos-
ton Co., a Boston-based economic and investment advisory firm.



The rating used by the Conference Board, a private business
research group in New York, is based on a 1985 setting of 100 and
is often seen as a signal of consumer willingness to spend more
money in anticipation of better times, thus adding to the likeli-
hood of an economic upsurge.

 Michael H. Sherman, a managing director at Lehman Brothers Inc.,
said today's surge in the Dow Jones average of 30 leading indus-
trial stocks was a reflection of the consumer confidence and dur-
able goods reports. "People are settling down," he said. "It is a
triumph of hope over experience."

 John W. Burnett, senior vice president for securities dealer
Donaldson, Lufkin & Jenrette, said "there is still a little bit
of Clinton euphoria. There is a perception that the economy is
not going to triple dip and that things are getting a tad
better."

 The Dow average, which climbed 25.66 points to reach 3,248.70
today, "was playing catch-up ball" after lagging behind other
stock indexes that hit record highs Friday, he said. Oil stocks
and blue-chip companies such as  International Business Machines
Corp. and Minnesota Mining and Manufacturing Co. did particularly
well, Burnett said.

 Richard McCabe, first vice president of Merrill Lynch & Co.'s
market analysis department, noted the Standard & Poor's index of
500 stocks closed at 427.59 points, a new record, and the New
York Stock Exchange composite index also hit a new high of 235.27
points. McCabe said "this may mean that the Dow may get back to
its June high" of 3413.21.  The level of consumer confidence was
the highest since June, when the Conference Board index was at
72.6. The November increase was the highest recorded since the
Persian Gulf War.

 Both sides in the recent election hailed the good news, although
with widely conflicting interpretations of its causes and signi-
ficance. A Treasury Department spokeswoman said "this is an indi-
cation of the stronger economy based on the prudent measures the
Bush administration has taken over the past four years."

 George Stephanopoulous, transition communications director for
President-elect Clinton, cautioned against misplaced optimism
that might cripple plans to restructure the economy, and said at
a Little Rock, Ark., press conference that "even though we are
very heartened by the consumer confidence numbers ... we still
need a significant economic package next year."

 Cynthia Latta, senior financial economist at DRI/McGraw-Hill, a
Lexington, Mass., forecasting firm, also cautioned against upbeat
assessments. The new automobile and aircraft orders that stimu-
lated the durable goods index do not reveal any strong trend, she
said.

 "Car sales so far in November are doing poorly," said Sinai.
"Merchandise store sales in November are flat in comparison to a
year ago.  the doldrums."

He acknowledged, however, that the 2.7 percent growth in gross
domestic product that surprised analysts in the third quarter of
the year reflected a real improvement. Fourth-quarter growth,
Sinai predicted, "would be a little lower, in the 2 to 2.5 per-
cent range, but the economy will be on a higher plateau of
growth. I do think we are out of the rut."

 Orders for durable goods, ranging from clock radios to air-
liners, totaled a seasonally adjusted $124.4 billion in October,
the Commerce Department reported. The 3.9 percent increase was
the largest in 15 months, but was distorted by a 20 percent rise
in transportation equipment. Without the increase in automobile
and aircraft orders, the index would have dropped slightly.

 Orders for primary metals were up 5.1 percent and electrical
equipment up 1.5 percent, while industrial machinery orders were
down 4.5 percent.

"Even the most hopeful signs we see right now still are mixed,"
Stephanopoulous said. "The housing starts are down, unemployment
claims are still up. We still have a lot of long-term structural
problems in the economy that we have to address."<02:06 11-
25C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

For more information, send-email to American Cybercasting Cor-
poration (usa@AmeriCast.COM)