The Conference Board said that consumer confidence was off again in November, down from 72.4 in October to 70.4 in November. Sentiment had increased earlier in the year, rising from 58.4 in January to 82.1 in June. The June reading had been the highest level observed since January 2008. Since then, however, Americans have become less confident in the economy, with the government shutdown exacerbating that. We have seen a similar decline in optimism in the similar report from the University of Michigan and Thomson Reuters.
The largest decrease in sentiment in the Conference Board report came from weakened perceptions about the future economy. The expectations component has dropped from 91.1 in June to 69.3 in November, explaining much of the decline in the overall index.
At the same time, the index for current economic conditions has mostly languished over the past six months, ranging from 68.7 in June to 73.5 in September. The November reading for current conditions was 72.0, indicating a slight dropout in views about the present economy since September.
As usual, these data tend to move on expected income and labor market issues. In this case, the percentage of respondents saying that business conditions were “bad” rose from 23.0 percent to 25.2 percent, somewhat offsetting the improvement in those saying conditions were “good” (up from 19.5 percent to 19.9 percent). Likewise, over one-third of those taking the survey continue to suggest that jobs are hard to get, and the percentage expecting higher incomes in the coming months dropped from 15.7 percent to 14.9 percent.
The reduction in consumer confidence also weighed heavily on buying intentions. The percentage of respondents planning to purchase a home (down from 5.5 percent to 5.0 percent), automobile (down from 11.9 percent to 11.5 percent), or appliance (down from 50.5 percent to 45.4 percent) were all lower. As such, this survey responses stand in contrast to the more-positive retail sales numbers released last week for October.
Chad Moutray is the chief economist, National Association of Manufacturers.