The Conference Board Consumer Confidence Index, which has been declining since the summer, continued its downward trend in November. The Index now stands at 87.3 (1985=100), down from 95.2 in October. The Present Situation Index decreased to 115.4 from 118 in October. The Expectations Index declined to 68.7 from 80.
“This month’s deterioration in confidence was due primarily to the sharp decline in the Expectations Index,” said Lynn Franco, director of The Conference Board Consumer Research Center. “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. 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.”
Consumers’ assessment of present conditions waned further in November. Those claiming conditions are “good” decreased to 22.3 percent from 23.2 percent. Those saying conditions are “bad” increased to 19.1 percent from 16.6 percent. Consumers’ assessment of the job market was mixed. Those saying jobs are “hard to get” edged down to 21.3 percent from 22.8 percent, while those claiming jobs are “plentiful” decreased to 23.2 percent from 24.1 percent in October.
Consumers’ expectations for the next six months plummeted in November. Those expecting business conditions to worsen increased to 16.7 percent from 13.9 percent. Those anticipating business conditions to improve declined to 12.4 percent from 14 percent.
The outlook for the labor market was also more pessimistic. The percent of consumers expecting more jobs in the months ahead fell to 10.8 percent from 13.3 percent, while those anticipating fewer jobs rose to 23.1 percent from 20.2 percent. The proportion of consumers expecting their incomes to decrease in the months ahead increased to 11.0 percent from 9.1 percent.
The monthly survey is based on a representative sample of 5,000 U.S. households. It is conducted for The Conference Board by TNS. The cutoff date for November’s preliminary results was Nov. 19.