Consumer Confidence Posts a Rare 11-Point Rise : Economy: Index climbed to 71.2 in November, the latest in growing evidence of U.S. turnaround. And California may be joining in.

Consumer confidence rallied dramatically in California and the rest of the nation last month, the Conference Board reported Tuesday, raising hopes for a robust holiday shopping season and stronger economy next year.

The unusual gain of nearly 11 points on the board’s index of consumer confidence was the latest sign of a warming economy and suggested that optimism is spreading into parts of the country where hard times have lingered.

Such a rise in the consumer poll “has occurred only rarely in the 25-year history of this survey program,” reported the board, a New York-based business research organization which surveys 5,000 households each month.

The number of respondents describing current business conditions as “bad” declined sharply in November, while the number reporting that jobs are plentiful increased. The West Coast and New England were among the hard-hit regions where confidence shot up last month.

Nonetheless, there were limits to the good news. Pessimists still outnumber optimists when it comes to assessing prevailing business and employment conditions, according to the survey.

More broadly, the overall level of consumer confidence remains lackluster, and some analysts cautioned Tuesday against reading too much into the latest report.

“When people see what their tax liabilities are in the New Year, their moods will darken considerably,” predicted Irwin Kellner, chief economist at Chemical Bank in New York.

Others pointed out that the economy will have to create many more jobs before today’s upbeat spirits can be expected to endure next year.

Lynn Reaser, chief economist at First Interstate Bancorp in Los Angeles, said that while she found the report encouraging, “I think it is not backed up by the employment numbers that we have seen.”

Consumer spending accounts for two-thirds of U.S. economic activity, so analysts look to gauges of consumer confidence for clues to the future course of the economy.

Word of a leap in consumer confidence spread rapidly Tuesday on Wall Street, where investors struggled to sort out a mixed message: A stronger economy would raise the chance of inflation and higher interest rates--slamming the bond market--but would be expected to buoy corporate profits, aiding stock values.

The consumer news helped topple the inflation-sensitive U.S. Treasury bond market, which had gained Monday on a slide in oil prices. The benchmark 30-year bond fell a full point to 99-8/32, pushing its yield up to 6.31% from 6.23%.

But the Dow Jones industrial average rose 6.15 to close at 3683.95

“While the measure of consumer confidence chalked up an imposing gain in November, the present index reading is still at a level generally associated with a lackluster economy,” said Fabian Linden, director of the board’s research center.

“However, the impressive magnitude of the November gain strongly suggests that better times may well be on the way.”

The board said its index rose to 71.2 in November, from a revised 60.5 in October.

The consumer confidence survey is the latest in a growing catalogue of evidence that the economy is undergoing a growth spurt--and that California may at least be starting to participate. Earlier this week, for instance, the National Assn. of Realtors reported that home sales, led by California, hit a 14-year peak last month.

And in a separate report Tuesday, pointing to an expanding manufacturing economy, the Purchasing Management Assn. of Chicago said its monthly index rose in November.

The group said its measure of activity in the key Midwestern manufacturing region climbed to 65.3% in November from 57% in October. An index below 50% signals a slowing manufacturing economy, while a reading above 50% suggests expansion.

The group said its new orders index reached the highest level in more than six years.

Consumer Confidence

From a monthly survey of 5,000 U.S. households.

1985=100

Nov., ‘93: 71.2

Source: Conference Board