U.S. Consumer Confidence Improves in November Following Three Straight Months of Decline

The Conference Board's Index of Consumer Confidence rose 2.9% during November (0.6% y/y) to 102.0 after declining 5.0% during October to 99.1, revised from 102.6. The index fell 4.0% in September and 4.6% in August. The latest reading remained well below the high of 137.9 in October 2018 and below the June 2021 high of 128.9. A reading of 100.7 for November had been expected in the Action Economics Forecast Survey.

The Expectations Index rose 7.0% (1.4% y/y) to 77.8 this month after falling 4.8% in October. It remained up from a most recent low of 70.4 in February but below this year’s high of 88.0 in July. The Present Situations Index eased 0.3% (-0.1% y/y) to 138.2 after declining to 138.6 in July, revised from 143.1. It reached a high of 155.3 in June.

Twenty percent of respondents characterized current business conditions as good in November, up from 18.3% in October but off a high of 23.4% in June. These figures are still above their low of 16.3% in July of 2022. Labor market readings were little changed this month. The jobs gap, representing the difference between respondents indicating that jobs are plentiful versus those saying jobs are hard to get, edged up to 23.9% from 23.8% in October. Both were below the March 2022 high of 47.1. Calculated by Haver Analytics, this series has a 64% correlation with the unemployment rate over the last ten years. The jobs plentiful measure rose to 39.3% from 37.9% and remained down from the March 2022 high of 56.7%. The jobs hard-to-get measure of 15.4% compared to 14.1% in October. It remained close to the highest level in two years. The jobs not-so-plentiful reading fell to 45.3%, standing well above its 30.5% low in September 2021.

Consumers assessment of future business conditions improved as an increased 17.3% of respondents felt that conditions would get better in six months. That was up from 15.5% in September but still below a high of 20.9% in December. A greater 16.1% of respondents felt there would be more jobs in six months but it still was below 20.0% in December. An increased 17.2% expected income to increase in six months, up from 15.6% in October but below a high of 19.6% in October of last year.

The expected inflation rate in twelve months fell to 5.7% and reversed its October rise to 5.9%. It remained below the 7.9% high in June of last year, but remained above the 4.4% low in January 2020.

A lessened 56.0% of respondents felt that interest rates would be higher in twelve months, compared to 59.4% in October, while a higher 13.7% thought they would be lower. Thirty percent of respondents thought that stock prices would be higher in twelve months, compared to 31.9% in October. A higher 36.1% thought stock prices would be lower in twelve months versus a high of 44.7% in July of last year.

The share of respondents planning to buy a home within six months rose to 5.3% from 5.0% in October, but remained below the October 2022 high of 7.4%. The percentage of respondents planning to buy a major appliance rose m/m to 45.5% but has fallen from a high of 52.4% in October 2022.

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.

Reflections on the Economy and Monetary Policy from Fed Governor Michelle W. Bowman can be found here.