The Conference Board Consumer Confidence Index* decreased in November after losing ground in October. The Index now stands at 100.2 (1985=100), down from 102.2 in October.
The Index is at its lowest level since July when it fell to 95.7 when gas prices spiked, and inflation hit an all-time high. A reading above 100 suggests consumers have an “optimistic attitude” toward the economy and a higher inclination to spend.
The Present Situation Index (based on consumers’ assessment of current business and labor market conditions) decreased to 137.4 from 138.7 last month.
The Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, declined to 75.4 from 77.9.
“Consumer confidence declined again in November, most likely prompted by the recent rise in gas prices,” said Lynn Franco, senior director, Economic Indicators, at The Conference Board. “The Present Situation Index moderated further and continues to suggest the economy has lost momentum as the year winds down. Consumers’ expectations regarding the short-term outlook remained gloomy. Indeed, the Expectations Index is below a reading of 80, which suggests the likelihood of a recession remains elevated.
“Inflation expectations increased to their highest level since July, with gas and food prices as the main culprits. Intentions to purchase homes, automobiles and big-ticket appliances all cooled. The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023,” concluded Franco.
Consumers’ assessment of current business conditions was mixed in November, with 18.2 percent of consumers saying business conditions were “good,” up from 17.7 percent. However, more consumers, 26.7 percent, said business conditions were “bad,” up from 24.0 percent.
Consumers’ appraisal of the labor market was more favorable with 45.8 percent saying jobs were “plentiful,” up from 44.8 percent, and 13.0 percent saying jobs were “hard to get,” unchanged from last month.
According to the Index, consumers remain pessimistic about November’s short-term business conditions outlook with 19.9 percent expecting business conditions to improve, up slightly from 19.6 percent, and 22.7 percent expecting business conditions to worsen, down from 24.3 percent.
Consumers were more downbeat about the short-term labor market outlook with 18.6 percent expecting more jobs to be available, down from 19.5 percent and 21.4 percent anticipating fewer jobs, up from 20.8 percent.
Consumers were also more pessimistic about short-term income prospects, with 17.2 percent expecting their incomes to increase, down from 19.6 percent and 16.6 percent expecting their income would decrease, up from 15.2 percent.
*Based on an online sample, the monthly Consumer Confidence Survey is conducted for The Conference Board by Toluna. The cutoff date for the preliminary results was November 18.
