Consumer confidence unexpectedly declined in November from a seven-year high as Americans became less upbeat about the economy and labor market.
The Conference Board’s index fell to 88.7 this month from an October reading of 94.1 that was the strongest since October 2007, the New York-based private research group said Nov. 25. The figure last month was weaker than the most pessimistic estimate in a Bloomberg survey of economists.
The decline this month interrupts a steady pickup in sentiment since the middle of the year and shows attitudes about the economy would benefit from faster wage growth. At the same time, further confidence probably will be underpinned as stocks rally to a record, the labor market closes in on its best year since 1999 and gas prices drop to levels unseen since November 2010.
“Confidence in general has been trending up,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, said before the report. “The numbers have been generally moving up, consistent with an improving labor market and lowering gasoline prices.”
The median forecast in the Bloomberg survey called for a reading of 96. Estimates of 75 economists ranged from 93.5 to 99 after a previously reported October index of 94.5. The Conference Board’s measure averaged 96.8 during the last expansion and 53.7 during the recession that ended in June 2009.
The Conference Board’s index of consumer expectations for the next six months decreased to 87 this month from 93.8.
The gauge of present conditions barometer dropped to a four-month low of 91.3 from 94.4. The share of Americans who said business conditions were good decreased to 24%, the lowest in three months.
The report is at odds with other readings on sentiment. The Thomson Reuters/University of Michigan preliminary November gauge reached a seven-year high, and the weekly Bloomberg Consumer Comfort Index rose last week to the highest level since January 2008.
The Conference Board’s data showed Americans’ assessments of current and future labor-market conditions weakened. The share of Americans who said jobs were currently plentiful fell to 16% from 16.5%. The share that said jobs were hard to get was little changed at 29.2% after 29% in October.
A smaller number of consumers expected more jobs to become available in the next six months as the share fell to 15% from 16%.
