Consumer confidence in the U.S. has unexpectedly seen a substantial deterioration in the month of November, the Conference Board revealed in a report on Tuesday. The October reading for the headline index was revised up to 99.1, which was initially 97.6.
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In a client preview, Barclays economists wrote, “The preliminary estimate of the University of MI survey showed a healthy increase in November, with broad-based support from current conditions and consumer expectations”. “The decline was mainly due to a less favorable view of the job market”. Those stating jobs are “plentiful” decreased from 22.7 percent to 19.9 percent, while those claiming jobs are “hard to get” increased to 26.2 percent from 24.6 percent. Those saying business conditions are “good” decreased from 26.8 percent to 24.4 percent. Those who expect their incomes to increase fell to 17.2 percent from 18.1 percent.
“Consumer confidence retreated in November, following a moderate decrease in October”, The Conference Board director of economic indicators Lynn Franco said in a statement.
Much of the drop can be attributed to downbeat responses to questions about the job market.
“We note that only 31% of respondents (up 4ppts m/m) believe that their families are better off financially than they were a year ago, and only 32% believe that their financial situation will improve over the next year”, said Glenn Maguire, ANZ Chief Economist for South Asia, ASEAN & Pacific. Stein expects the jobless rate to continue on a downtrend to 4.5 percent by late 2016 or mid-2017. This reading is up 12.4% in November, compared to a 9.8% gain in October, and is indicative of a substantial rise in the number of auto sales for the upcoming retail sales report.
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With the holiday shopping season looming, consumer confidence declined for the second month in a row in November as Americans expressed fears about the job market.
