American Consumer Confidence Improves in November, But Caution with Downward Revisions

The Conference Board’s Consumer Confidence Index came in higher than expected at 102.0 for November (consensus 100.0). However, this came after a downwardly revised 99.1 (from 102.6) for October. Without the downwardly revised number for the prior month, it was lower, all in the headline as they say in these instant news cycles for the algorithms. Two things stood out, rising prices and higher interest rates are still pressuring consumer confidence. However, year-ahead inflation expectations dipped to 5.7% from 5.9%, still quite high, but moving in the right direction. Confidence in future business conditions, job availability, and incomes for the next six months improved supporting the market’s prevailing soft-landing outlook.

High interest rates, inflation coming down but rising prices in general, and for groceries and gasoline in particular are reflected with less hope. Consumers continued to report intentions to spend less on discretionary services.

US Consumer Confidence November 2023

US CB Consumer Confidence Nov : 102.0 (1985=100) from downwardly revised 99.1 (from 102.6) for October.

  • Present situation index 138.2 v 143.1 prior (prior revised to 138.6)
  • Expectations index 77.8 v 75.6 prior
  • Expectations 80 level historically signals a recession within the next year.
  • 1 year Inflation 5.7% v 5.9% prior
  • Jobs hard-to-get 15.4 v 13.1 prior

“Consumer confidence increased in November, following three consecutive months of decline,” said Dana Peterson, Chief Economist at The Conference Board. “This improvement reflected a recovery in the Expectations Index, while the Present Situation Index was largely unchanged. November’s increase in consumer confidence was concentrated primarily among householders aged 55 and up; by contrast, confidence among householders aged 35-54 declined slightly. General improvements were seen across the spectrum of income groups surveyed in November. Nonetheless, write-in responses revealed consumers remain preoccupied with rising prices in general, followed by war/conflicts and higher interest rates.”

Peterson added: “Assessments of the present situation ticked down in November, driven by less optimistic views on current job availability, which outweighed slightly improved views on the state of business conditions. More consumers said that business conditions were ‘good’ compared to last month, but more also said they were ‘bad.’ Regarding the employment situation, more consumers said that jobs were ‘plentiful’ compared to October, but the number saying jobs were ‘hard to get’ also increased. By contrast, when asked to assess their current family financial conditions (a measure not included in calculating the Present Situation Index), the share reporting ‘good’ rose, and those citing ‘bad’ fell, suggesting consumer finances remain healthy heading into the holiday season.”

“Consumer expectations for the next six months recovered in November, reflecting improved confidence about future business conditionsjob availability, and incomes. Compared to last month, expectations that interest rates will rise in the year ahead ticked down, but consumers’ outlook for stock prices continued to weaken in November. Meanwhile, average 12-month inflation expectations receded back to 5.7 percent after a one-month uptick to 5.9 percent. Consumers’ views of their expected family financial situation, six months hence (not included in calculating the Expectations Index) recovered in November, after ticking down for the past two months. Buying plans for autos, homes, and big-ticket appliances trended downward on a six-month basis—perhaps reflecting the impact of elevated interest rates.”

Present Situation

Consumers’ assessment of current business conditions was, on balance, slightly more positive in November.

  • 19.8% of consumers said business conditions were “good,” up from 18.3% in October.
  • However, 19.5% said business conditions were “bad,” up from 18.8%.

Consumers’ appraisal of the labor market was mixed in November.

  • 39.3% of consumers said jobs were “plentiful,” up slightly from 37.9% in October.
  • However, 15.4% of consumers said jobs were “hard to get,” up from 14.1%.

Expectations Six Months Hence

Consumers were less pessimistic about the short-term business conditions outlook in November.

17.3% of consumers expect business conditions to improve, up from 15.5% in October.
19.5% expect business conditions to worsen, down from 20.9%.
Consumers’ assessment of the short-term labor market outlook was slightly more optimistic in November.

16.1% of consumers expect more jobs to be available, up from 15.3% in October.
19.6% anticipate fewer jobs, down slightly from 19.7%.
Consumers’ assessment of their short-term income prospects improved in November.

17.2% of consumers expect their incomes to increase, up from 15.6% in October.
12.1% expect their incomes to decrease, down from 13.4%.

Assessment of Family Finances and Recession Risk

Consumers’ assessment of their Family’s Current Financial Situation improved in November.

Consumers’ assessment of their Family’s Expected Financial Situation, Six Months Hence was also more optimistic in November.

Stock market performance and Sentiment Closely Correlated.

Source: University of Michigan and Yahoo

About The Conference Board

The Conference Board publishes the Consumer Confidence Index® at 10 a.m. ET on the last Tuesday of every month. Subscription information and the technical notes to this series are available on The Conference Board website: https://www.conference-board.org/data/consumerdata.cfm.

The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org.

Source: The Conference Board

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