NEW YORK (
) -- This holiday shopping season is one of the most crucial in decades as retailers pull out all the stops to get consumers to spend liberally.
Strong sales could do wonders for the stock market and the economy as investors try to determine if the turnaround is for real or just a bounce before the misery continues. Retailers got a pre-Thanksgiving shot in the arm today as the Conference Board reported that consumer confidence unexpectedly picked up in November.
Even with unemployment rising, consumers have been enticed by bargains at
, which are spending heavily on TV ads and discounting products steeply to ensure that foot traffic is high over the next month. Super deals like $300 flat-panel TVs would motivate even the stingiest of people. There might just be a mini-miracle this Christmas.
The biggest gains in consumer confidence were found in states along the diagonal line from Florida to North Dakota, while New England and the Mountain region were again among the gloomiest regions. The heartland has been the least affected by economic problems because the housing boom never got out of hand and the oil industry is sustaining many communities. Texas, Oklahoma and Arkansas were the most confident, though confidence has been deteriorating.
Elevated confidence will most likely lead to looser purse strings during the holiday season, which should come as a welcome reprieve for retailers.
could be one of the biggest beneficiaries since flat-panel TVs and other entertainment gear should be hot sellers. Customers may actually be inclined to buy another model up or trade in Wal-Mart for the specialty retailer's expertise.
With confidence still well below last year's level and nearly half that of 2007, there's still a long way to go until the American consumer once again spends freely. But an uptick ahead of the holiday season is encouraging. Buying retailers now and selling in January could be a good way to play the frenzy that surrounds the holidays.
-- Reported by David MacDougall in Boston.
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Prior to joining TheStreet.com Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level III CFA candidate.