Consumer Confidence Deteriorates In November

On the Conference Board's measure, consumer confidence surprisingly deteriorated in November. Having dipped in October to (an upwardly revised) 126.1, the composite headline index shed a further 0.6 points to 125.5, comfortably on the soft side of the Econoday consensus and the lowest reading since June. The latest decline was wholly attributable to present conditions where the sub-index dropped from 173.5 to 166.9. By contrast, expectations actually gained more than 3 points to 97.9.

Consumers assessment of business conditions saw a net worsening as did their view of the labour market. Regarding the latter, those saying jobs are "plentiful" decreased from 47.7 percent to 44.8 percent, while those claiming jobs are "hard to get" increased from 11.6 percent to 12.7 percent. The outlook for the labour market was seen mixed. Taken together, these findings may have some negative ramifications for next week's November employment report. Still, it was far from all bad news as households were slightly more optimistic about the short-term outlook.

Despite the latest setback, outside of the July/August bounce, the Conference Board's sentiment gauge remains broadly in line with levels seen over much of the rest of the year. Back-to-back falls are hardly good news but on balance today's report should not be inconsistent with continued limited gains in consumer spending over the next month or so.