Consumers’ Assessment Of Economy’s Future Strength Undermines Confidence
Consumer confidence slipped in November. After registering a relatively flat October, the Conference Board Consumer Confidence Index registered at 96.1 for November, down from 101.4 one month earlier.
The Conference Board’s Present Situation Index, based on consumers’ assessment of current business and labor market conditions, decreased slightly from 106.2 to 105.9. The Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, declined from 98.2 in October to 89.5 this month.
“Consumer confidence declined in November, after remaining virtually flat in October,” says Lynn Franco, senior director of economic indicators at The Conference Board. “Consumers’ assessment of present-day conditions held steady, though consumers noted a moderation in business conditions, suggesting growth has slowed in fourth quarter. Heading into 2021, consumers do not foresee the economy, nor the labor market, gaining strength. In addition, the resurgence of COVID-19 is further increasing uncertainty and exacerbating concerns about the outlook.”
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was November 13.
Consumers’ assessment of current conditions was relatively unchanged in November. The percentage of claiming business conditions are “good” decreased from 18.6 percent to 17.6 percent, but those claiming business conditions are “bad” also declined, from 34.4 percent to 33.5 percent. Consumers’ assessment of the labor market was unchanged. The percentage saying jobs are “plentiful” held steady at 26.7 percent, while those claiming jobs are “hard to get” was virtually unchanged at 19.5 percent.
However, consumers have grown less optimistic about the short-term outlook. The percentage of consumers expecting business conditions to improve over the next six months decreased from 36 percent to 27.4 percent, while those expecting business conditions to worsen increased from 15.9 percent to 19.8 percent. Consumers’ optimism regarding the job market also weakened. The proportion expecting more jobs in the months ahead declined from 32 percent to 25.9 percent, while those anticipating fewer jobs increased moderately from 19.8 percent to 20.5 percent. Regarding their short-term income prospects, the percentage of consumers expecting an increase was virtually unchanged at 17.6 percent, while the share expecting a decrease declined from 14.2 percent to 13.3 percent.