Consumer confidence fell to a three-month low as hope faded across America in November.
The Conference Board’s Index of Consumer Confidence dropped to 96.1 from a revised October reading of 101.4. That was a bigger drop off than expected by economists.
Four years ago, the index soared as consumers cheered the election of Donald Trump. The 2020 election has not generated similar enthusiasm, indicating Americans do not have much hope that a Biden presidency will be able to lift the U.S. economy out of its coronavirus pandemic induced doldrums.
The November slump in confidence was driven by a decline in the outlook for the near-term future. The share of consumers expecting business conditions will improve over the next six months shrank from 36.0 percent to 27.4 percent, while those expecting business conditions will worsen grew from 15.9 percent to 19.8 percent.
Optimism regarding the job market also weakened.
The percentage expecting more jobs in the months ahead fell 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 portion 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 gauge of how consumers feel about current conditions declined only slightly, slipping to 105.9 from 106.2. This suggests that consumers were not yet feeling the pinch from the explosion of new Covid-19 cases by the time the survey was completed on November 13.
The percentage of consumers saying business conditions are “good” declined from 18.6 percent to 17.6 percent, but those saying 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 claiming that jobs are “plentiful” held steady at 26.7 percent, while those claiming jobs are “hard to get” was virtually unchanged at 19.5 percent.
Confidence has not recovered to pre-pandemic levels. The index registered 132.6 in February.