Consumer confidence dropped for the fourth straight month in November as Americans grew more pessimistic about business conditions, jobs and gas prices, The Conference Board reported today.
The Consumer Confidence Index, based on a representative sample of 5,000 U.S. households, declined to 87.3 this month from 95.2 in October, taken lower by the Expectations Index component, which slid during the period from 80 to 68.7 on a disappointing outlook for jobs and incomes.
“This month’s deterioration in confidence was due primarily to the sharp decline in the Expectations Index,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a press statement. “Consumers’ apprehension about the short-term outlook is being fueled by volatility in financial markets, rising prices at the pump and the likelihood of larger home heating bills this winter. In fact, consumers’ inflation expectations have surpassed the spike experienced this spring, and a larger percentage than last month expect stock prices to decline.”
According to The Conference Board, the percentage of consumers surveyed this month who claimed present conditions are “good” dropped to 22.3 percent from 23.2 percent in October, and the percentage saying conditions are “bad” climbed from 16.6 percent to 19.1 percent.
Consumers’ assessment of the current job market was mixed, with the percentage saying jobs are “hard to get” down to 21.3 percent from 22.8 percent last month and the percentage claiming jobs are “plentiful” declining to 23.2 percent from October’s 24.1 percent.
For the next six months, some 16.7 percent of consumers surveyed expect business conditions to worsen, up from 13.9 percent in October. Just 12.4 percent anticipate an improvement in business conditions, compared with 14 percent last month.
The six-month outlook for the labor market worsened in November, with just 10.8 percent of consumers expecting more jobs, down from 13.3 percent a month earlier. Those expecting fewer jobs rose to 23.1 percent from 20.2 percent, while the proportion of consumers expecting their incomes to fall in the months ahead increased to 11 percent from 9.1 percent.
The Conference Board’s Franco added that “the Present Situation Index, despite losing ground, still suggests the economy is expanding, albeit slowly. Despite this rather bleak outlook, consumers have not lost their holiday spirit and anticipate spending more on gifts this season than they did last Christmas.”