United States: Consumer confidence dips in November on less optimistic expectations
The Conference Board’s monthly consumer confidence fell from 137.9 in October to 135.7 in November, missing market expectations of 136.5. Despite the dip, the index remained well above the 100-point threshold that separates consumer optimism from pessimism, and near the all-time record high of 144.7 registered in January and May 2000.
The lower reading in November was due to a marked decrease in consumers’ optimism regarding the six-month outlook. However, their perception of the present situation improved slightly, a positive sign for private consumption as the country heads into the holiday season—typically of crucial importance for the retail sector.
Regarding the present situation index, the improvement came largely on the back of a more favorable view of the labor market. Indeed, a closely watched indicator of labor market conditions, the labor differential—the difference between the percentage of respondents who state that jobs are plentiful and those who say that jobs are hard to get—rose from 32.0 in October to 34.4 in November. On the other hand, consumers’ assessment of current business conditions turned somewhat less optimistic, as a larger share of respondents described them as “bad” compared to October.
Meanwhile, consumers’ perception of business conditions in the coming six months, while still largely optimistic, deteriorated in November, with the share of respondents expecting an improvement sharply dropping, while the share expecting a deterioration increased. This was also reflected in a less favorable view of consumers’ own income prospects in the near-term—the share of respondents expecting their prospects to worsen declined marginally, but the share expecting their prospects to improve declined by a larger magnitude. Finally, consumers’ outlook regarding the labor market was largely unchanged in November, as the proportion of respondents expecting more or fewer jobs in the coming months both increased by the same amount.
Commenting on November’s results, Lynn Franco, Senior Director of Economic Indicators at The Conference Board, noted:
“Overall, consumers are still quite confident that economic growth will continue at a solid pace into early 2019. However, if expectations soften further in the coming months, the pace of growth is likely to begin moderating.”