by Increase is the first in several months, a potential plus for holiday spending. Still, high interest rates have consumers leery of big-ticket spending, which could impact furniture sales
WASHINGTON — The Consumer Confidence Board reported this week that the Consumer Confidence Index rose to 102 in November, up from a downwardly revised 99.1 in October.
This reverses three months of consecutive declines, which officials said reflected a recovery in the Expectations Index, which rose to 77.8 in November, up from a downwardly revised 72.7 in October. The Expectations Index is based on consumers’ short-term outlook for income business and labor market conditions.
Meanwhile, the Present Situation Index, based on consumers’ assessment of current business and labor market conditions, dropped slightly to 138.2 from 138.6.
Dana Peterson, chief economist for the Conference Board, said that the increase in consumer confidence was concentrated among consumers ages 55 and up, with confidence among those ages 35-54 declining slightly. Peterson added that “general improvements were seen across the spectrum of income groups surveyed in November. Nonetheless, write-in responses revealed consumers remain preoccupied with rising prices in general, followed by war and other conflicts and higher interest rates.”
And despite the improvements, officials noted that the Expectations Index remains below 80 for a third consecutive month, which historically has signaled a recession in the next year. And even though consumer fears of a recession were among the lowest levels seen this year, two-thirds of those surveyed in November said they believe a recession to be “somewhat” or “very likely” to occur in the next 12 months. “This is consistent with the short and shallow recession we anticipate in the first half of 2024,” the report said.
The Present Situation Index offered some improvements in November. For example, 19.8% of consumers said that business conditions were good, up from 18.3% in October, while 39.3% of consumers said that jobs were plentiful, up slightly from 37.9% in October.
However, 19.5% described business conditions as bad, up from 18.8% in October. And 15.4% said jobs were hard to get, up from 14.1% in October.
The Expectations Index for six months from now showed that consumers were less pessimistic about short-term business conditions.
For example, 17.3% of consumers said they expect business conditions to improve, up from 15.5% in October, while 19.5% expect business conditions to worsen, down from 20.9% in October. Consumers’ assessment of the short-term labor market also was improved in November, with 16.1% saying they expect more jobs, up from 15.3% in October, and 19.6% expect fewer jobs, down slightly from 19.7% in October.
Other positive highlights of the report were as follows:
+ 17.2% of consumers expect their incomes to increase, up from 15.6% in October.
+ 12.1% expect their incomes to decrease, down from 13.4% in October.
+ In addition, consumers’ assessment of their family’s current financial situation was slightly improved in November as was their assessment of their expected financial situation six months from now. The assessment of consumers’ current financial situation suggests that consumer finances remain healthy heading into the holiday season, the report said.
However, the report noted that buying plans for autos, homes and other big-ticket appliances trended downward on a six-month basis, “perhaps reflecting the impact of elevated interest rates.”
