The Conference Board Consumer Confidence Index (CCI) fell more than expected by 5.3 points in November and was revised higher for October. The Index now stands at 96.1 (1985=100), down from an upwardly revised reading of 101.4. Pandemic aside, this is the lowest consumer confidence reading since May 2016 and the first in the 90s since a month before Donald J. Trump won the presidency in November 2016.
Without a doubt, the decline was driven by consumers’ views about the future. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — fell only slightly from 106.2 to 105.9. But the Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — declined significantly from 98.2 to 89.5.
“Consumer confidence declined in November, after remaining virtually flat in October,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of present-day conditions held steady, though consumers noted a moderation in business conditions, suggesting growth has slowed in Q4.”
“Heading into 2021, consumers do not foresee the economy, nor the labor market, gaining strength. In addition, the resurgence of COVID-19 is further increasing uncertainty and exacerbating concerns about the outlook.”
The Consumer Confidence Survey (CCI) is based on a probability-design random sample and is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was September 18. The cutoff date for the preliminary results was November 13.
Consumers’ appraisal of current conditions was relatively unchanged in November. The percentage of consumers claiming business conditions are “good” declined from 18.6 percent to 17.6 percent, but those claiming business conditions are “bad” also decreased, from 34.4 percent to 33.5 percent. Consumers’ assessment of the labor market was unchanged. The percentage of consumers saying jobs are “plentiful” held steady at 26.7 percent, while those claiming jobs are “hard to get” was virtually unchanged at 19.5 percent.
Consumers, however, have grown less optimistic about the short-term outlook. The percentage of consumers expecting business conditions will improve over the next six months decreased from 36.0 percent to 27.4 percent, while those expecting business conditions will worsen increased from 15.9 percent to 19.8 percent. Consumers’ optimism regarding the job market also weakened. The proportion expecting more jobs in the months ahead declined from 32.0 percent to 25.9 percent, while those anticipating fewer jobs increased moderately from 19.8 percent to 20.5 percent. Regarding their short-term income prospects, the percentage of consumers expecting an increase was virtually unchanged at 17.6 percent, while the proportion expecting a decrease declined from 14.2 percent to 13.3 percent.The Conference Board Consumer Confidence Index® Decreased in November