U.S. Consumer Confidence Weakens in November; Inflation Expectations Steady

The Conference Board's Index of Consumer Confidence fell 7.1% in November to 88.7. A level of 92.5 had been expected this month in the Action Economics Forecast Survey. The decline in Consumer Confidence was the fourth consecutive monthly drop. It followed a 0.1% October easing (revised -1.0%) and an unrevised 2.2% September shortfall. The index was 21.4% below its peak last November.

The Present Situation index declined 3.3% (-10.3% y/y) after rising 2.9% in October, revised from 1.4%, and falling an unrevised 3.7% in September. The Expectations Index weakened 12.0% (-32.6% y/y) after falling 3.5% in October, revised from -3.9%, after easing an unrevised 0.4% in September.

The percentage of respondents assessing business conditions as “good” fell to 20.1% in November after rising to 20.7% in October. It was the weakest reading since April. The percentage assessing conditions as “bad” rose to 16.9% from 14.5% in October, the most in over a year. The appraisal of labor market conditions weakened as a lessened 27.6% described “jobs plentiful” versus 28.6% in October. That remained below a high of 56.7% in March of 2022. Jobs were viewed as “hard to get” by a lessened 17.9% of respondents this month, but that was increased from a low of 10.5% in February 2023. The labor market differential calculated by Haver Analytics (the percentage of consumers who think jobs are plentiful minus the percentage who believe that jobs are currently hard to get) declined to 9.7% compared to 10.3% in October and 8.7% in September. This measure remained below a high of 47.1% in March 2022. It has a 60% correlation with the unemployment rate over the last ten years.

Expectations for business conditions continued to deteriorate this month as a lessened 15.9% of respondents expect conditions to improve over the next six months, after 18.9% did so in October. A higher 27.7% expect them to worsen, after rising from 22.2% in October. On employment, 14.6% expect the number of jobs to increase over the next six months versus 15.8% in October. The percentage expecting the number of jobs to decline in the next six months fell to 27.5% after rising to 28.8% in October . A lessened 15.3% of respondents expect income to increase in six months, down from 18.2% in October. That remained off a high of 20.7% in November of last year and compares to a 13.8% who expect income to decrease, up from 11.8% in October.

The expected rate of price inflation over the next twelve months held steady at 5.7% after falling from 5.8% in September and 6.1% in August. These remain up from a low of 5.0% last November. Fifty percent of respondents expect interest rates to rise this year, up from a low of 47.2% October of 2024. The percentage of respondents expecting equity prices to increase over the next twelve months declined to 48.1%, down from 50.3% in October. The percentage expecting a decline in stock prices eased to 28.5% after falling to 28.8% in October.

The percentage of respondents planning to buy a home fell to 4.9% this month down from a high of 6.7% in May. Plans to purchase an automobile declined sharply to 10.9% of respondents this month, down from 13.15 averaged in the fourth quarter of last year. These readings, nevertheless, remain up from a low of 10.6% in April.

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.