October’s Consumer Reports Index, a measure of overall consumer financial health, showed some hopeful signs for the economy, but old problems persist. “As we approach the holiday season, there is some positive movement in retail,” said Ed Farrell, director of the Consumer Reports National Research Center. “However, a strong holiday season will depend on consumers having clear signs that the economy is on the mend, which to this point has been lacking. Weak employment, financial difficulties, and poor confidence overall continue to present a powerful headwind for holiday sales.”

The Consumer Reports Sentiment Index dropped slightly to 47.6, down from 48.8 in September. This index captures respondents’ attitudes regarding their financial situation, asking them if they are feeling better or worse off than a year ago. When the index is greater than 50, more consumers are feeling positive about their situation. When it is below 50, more consumers are feeling worse. While sentiment in most major regions in the U.S. remained virtually unchanged, the Northeast dropped 11.3 points to 39.0 after spending August and September in positive territory.

The Consumer Reports Employment Index improved slightly to 50.2, breaking into positive territory (over 50) with past 30-day job gains outpacing losses by a very slim margin. But even though the past 30-day job gains outpaced job losses, the improvement is tenuous and uneven. Among those households earning less than $50,000, the Consumer Reports Employment Index is still in the red.

The Consumer Reports Trouble Tracker, a gauge of the breadth and depth of financial difficulties among American households, climbed to 49.7. This increase reflects a rise in financial problems that include: the inability to pay for medical bills or medications; lost or reduced health care coverage; and missed payments on a major bill other than a mortgage.

However, the retail indicators tracking recent and planned spending moved in a positive direction this month. The Consumer Reports Past 30-Day Retail Index rebounded up to 11.3 after hitting a 10-month low last month, led by purchases of big-ticket items, including major appliances and major home electronics.

The Consumer Reports Index comprises five key indices: the Sentiment Index, the Trouble Tracker Index, the Stress Index, the Retail Index, and the Employment Index. Conducted by the Consumer Reports National Research Center, the Index is a monthly telephone and cell phone poll of a nationally representative probability sample of American adults. A total of 1,020 interviews were completed (770 telephone and 250 cell phone) among adults aged 18+. Interviewing took place between September 29 and October 2, 2011. The margin of error is +/- 3.2 percentage points at a 95% confidence level.