The mood of consumers grew more pessimistic in November, the Conference Board said on Tuesday.
The business organization’s overall consumer confidence index dipped to 100.2 from 102.2 in October, while the present situation index measuring how consumers view current economic conditions decreased to 137.4 from 138.7. The future expectations index, reflecting how consumers see the economy performing in the short term, declined to 75.4 from 77.9.
“Consumer confidence declined again in November, most likely prompted by the recent rise in gas prices,” said Lynn Franco, senior director of economic indicators at The Conference Board. “The Present Situation Index moderated further and continues to suggest the economy has lost momentum as the year winds down. Consumers’ expectations regarding the short-term outlook remained gloomy. Indeed, the Expectations Index is below a reading of 80, which suggests the likelihood of a recession remains elevated.”
Consumers remain vexed about inflation, with concern over rising prices for food and energy reaching their highest levels since July.
The confidence of Americans to spend money or make investments is a key barometer of the overall health of the economy, with consumer spending making up nearly 70% of the economy’s output. The index has been declining fairly consistently since a year ago, when it stood at 115, but for a couple of increases this summer.
However, Americans have continued to spend and, on Monday, they spent an estimated $11.3 billion online on a day retailers have branded as Cyber Monday, according to Adobe Analytics’ analysis of spending released Monday evening.
“With oversupply and a softening consumer spending environment, retailers made the right call this season to drive demand through heavy discounting,” said Vivek Pandya, lead analyst, Adobe Digital Insights. “It spurred online spending to levels that were higher than expected, and reinforced e-commerce as a major channel to drive volume and capture consumer interest.”
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