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Economy in Brief

U.S. Consumer Confidence Weakens in November
by Tom Moeller  November 30, 2021

• Appraisal of current conditions & expectations sag.

• Job market indexes improve.

• Price inflation expectations strengthen further.

The Conference Board Consumer Confidence Index declined 1.9% in November (+17.9% y/y) to 109.5 and reversed the October increase to 111.6, revised from 113.8. A November reading of 110.0 had been expected in the Action Economics Forecast Survey. The survey was conducted before the discovery of the Omicron variant of the coronavirus.

The Present Situation index fell 2.1% this month (+34.6% y/y) to 142.5 following a 0.8% October increase to 145.5, revised from 147.4. The Consumer Expectations reading weakened 1.6% (+3.9% y/y) to 87.6 in November after rising 2.7% in October to 89.0, revised from 91.3.

The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, rose to 46.9% of respondents this month from 43.8% in October, revised from 46.0%. This series has had a 71% correlation with the unemployment rate over the last ten years. The jobs plentiful measure rose to a record 58.0% of respondents this month. The series dates back to February 1967. The jobs hard-to-get measure was little changed at 11.1% of respondents, nearly the lowest level since June. The jobs-not-so-plentiful reading fell to 30.9% of respondents and reversed most of the October increase. The figure is down from 51.1 averaged in 2020.

Current business conditions were perceived as good by a greatly lessened 17.0% of respondents in November, down from a high of 25.2% in June. Expectations that business conditions would improve in six months rose modestly to 24.1% of respondents but remained well below the 2020 highs. More jobs were expected in six months by a lessened 22.1% of respondents. The percentage expecting rising income fell slightly in November to 17.9% and remained well below the 2019 highs.

The expected inflation rate in twelve months rose sharply to 7.6% in November from 7.1% in October, and remained up from a 4.4% low in January of last year. The share of respondents planning to buy a new home within six months fell to 0.4%, the lowest level since February 2013, and stood below a June 2020 high of 2.0%. Those planning to buy a major appliance declined to 45.8%, a six-month low.

Confidence of individuals under 35 years rose modestly this month after falling sharply in three of the prior four months. October was unchanged. Confidence amongst those between 35 and 54 fell 0.8% (+22.2% y/y). Confidence amongst individuals 55 and over fell for the fifth straight month.

The Consumer Confidence data are available in Haver's CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and market expectations are in AS1REPNA.

Coronavirus and CARES Act is the title of today's testimony by Federal Reserve Chair Jerome H. Powell. It is available here.

Conference Board (SA, 1985=100) Nov Oct Sep Nov '20 2020 2019 2018
Consumer Confidence Index 109.5 111.6 109.8 92.9 101.0 128.3 130.1
   Present Situation 142.5 145.5 144.3 105.9 109.8 169.8 164.8
   Expectations 87.6 89.0 86.7 84.3 95.2 100.6 107.0
Jobs Gap (%) 46.9 43.8 43.5 6.9 6.8 33.2 27.6
   Jobs Plentiful (%) 58.0 54.8 56.5 26.3 27.8 45.8 42.0
   Jobs Hard to Get (%) 11.1 11.0 13.0 19.4 21.0 12.6 14.4
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