A closely-watched gauge of consumer confidence edged lower for the fourth consecutive month in November, missing analysts’ estimates but nevertheless remaining at a level high enough to support predictions for solid spending during the festive season. The Conference Board’s Consumer Confidence Index posted a reading of 125.5 in November, down from the upwardly revised prior month’s reading of 126.1 and below the consensus estimate of analysts polled by Econoday for 126.9.
Sub-gauges presented a mixed picture. The Present Situation Index which is based on consumers’ assessments of current business and labor market conditions decreased from 173.5 to 166.9. The Expectations Index, meanwhile, which is based on consumers’ short-term outlook for income, business and labor market conditions rose from 94.5 last month to 97.9 this month.
Lynn Franco, senior director of economic indicators at The Conference Board said that the drop in sentiment on the headline index had been driven by “a softening in consumers’ assessment of current business and employment conditions”
Franco said that the decline in the Present Situation Index suggested that economic growth in the final quarter of 2019 “will remain weak”.
“By historical standards, the expectations index appears to point to very strong growth in real consumption, about 4%, but the relationship between the numbers since the 2016 election-which was followed by a surge in confidence, at least according to the survey-signals slower growth in spending in Q4,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, commented.
Jennifer Lee, senior economist at BMO Capital Markets said that “some of the results weren’t particularly worrisome. More survey respondents expect incomes to increase over the next six months, and fewer expect there to be fewer jobs out there. And, more are looking for the stock market rally to continue. Spending plans were mixed.”