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Economy in Brief

U.S. Consumer Confidence Falls Further in November
by Sandy Batten  November 26, 2013

Consumer confidence fell further in November - to 70.4 after having plunged in October from September's 80.2. The outsize October move had been attributed mostly to the federal government shutdown and budget battle that had transpired during the first half of October. This is the lowest reading on consumer confidence since April. The market consensus had looked for a small rebound in confidence in November. The decline in overall confidence continued to be driven by considerably more pessimistic expectations. The expectations index has fallen nearly 22 points since June.

Historically, changes in consumer confidence have been linked to changes in personal consumption. So, the significant hit to consumer confidence this fall clearly poses some risk to the upcoming Christmas-selling season. Indeed, surveys of purchase intentions (for homes, major appliances, autos over the next six months) experienced significant declines in November.

Looking at the detail, confidence continued to fall in the under 35 and under age group (where the October drop had been concentrated) but rebounded slightly in the over 55 age group. By income strata, confidence of those earning less than $15,000 and of those earning more than $50,000 took another significant step down in November, while confidence in the income groups in between rose slightly.

The labor market differential (the difference between respondents' appraisal of jobs plentiful and jobs hard to get) continued to edge up. Historically, this differential has had a close relationship with the unemployment rate. So, its continued improvement points to further improvement in the unemployment rate.

The Consumer Confidence data is available in Haver's CBDB database.

Conference Board (SA, 1985=100) Nov Oct Sep Y/Y % 2012 2011 2010
Consumer Confidence Index 70.4 72.4 80.2 -1.54 67.1 58.1 54.5
  Present Situation 72.0 72.6 73.5 25.44 49.8 36.1 25.7
  Expectations 69.3 72.2 84.7 -14.34 78.6 72.8 73.7
Consumer Confidence By Age Group
  Under 35 Years 79.7 83.7 109.4 -17.41 86.5 77.3 70.4
  Aged 35-54 Years 78.7 82.0 87.4 8.55 68.5 59.8 55.1
  Over 55 Years 59.6 57.9 62.9 -0.83 56.7 47.3 47.4
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