Consumer Confidence Up In November
As consumers across the United States began their holiday shopping in earnest they did so feeling more confident about the economy, according to new data from The Conference Board.
The Consumer Confidence Index was 102.0 in November, up from 99.1 in October. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, ticked down slightly to 138.2, from 138.6. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions—rose to 77.8 in November, up from 72.7 in October.
Despite this month’s improvement, the Expectations Index remains below 80 for a third consecutive month—a level that historically signals a recession within the next year. While consumer fears of an impending recession abated slightly to the lowest levels seen this year, about two-thirds of consumers surveyed in November still perceive a recession to be “somewhat” or “very likely” to occur over the next 12 months.
“Consumer confidence increased in November, following three consecutive months of decline,” said Dana Peterson, chief economist at The Conference Board. “This improvement reflected a recovery in the Expectations Index, while the Present Situation Index was largely unchanged.”
Peterson noted November’s bump in consumer confidence was concentrated primarily among households aged 55 and up. Households aged 35-54 decline slightly. General improvements were seen across the spectrum of income groups surveyed in November. Nonetheless, write-in responses revealed consumers remain preoccupied with rising prices in general, followed by war/conflicts and higher interest rates.”
Assessments of the present situation ticked down in November, driven by less optimistic views on current job availability, which outweighed slightly improved views on the state of business conditions. More consumers said that business conditions were “good” compared to last month, but more also said they were “bad.” Regarding the employment situation, more consumers said that jobs were “plentiful” compared to October, but the number saying jobs were “hard to get" also increased.
By contrast, when asked to assess their current family financial conditions (a measure not included in calculating the Present Situation Index), the share reporting “good” rose, and those citing “bad” fell, suggesting consumer finances remain healthy heading into the holiday season.
“Consumer expectations for the next six months recovered in November, reflecting improved confidence about future business conditions, job availability, and incomes,” Peterson said. “Compared to (October), expectations that interest rates will rise in the year ahead ticked down, but consumers’ outlook for stock prices continued to weaken in November.”