Financial News: U.S. Consumer Confidence Deteriorates Much More Than Expec

U.S. Consumer Confidence Deteriorates Much More Than Expected In November

(RTTNews) - A report released by the Conference Board on Tuesday showed a substantial deterioration by U.S. consumer confidence in the month of November.

The Conference Board said is consumer confidence index tumbled to 88.7 in November from an upwardly revised 95.5 in October.

Economists had expected the consumer confidence index to dip to 93.3 from the 94.6 originally reported for the previous month.

"Consumer confidence tumbled in November to its second lowest level since April after moving sideways for several months," said Dana M Peterson, Chief Economist, The Conference Board. "All five components of the overall index flagged or remained weak."

The much bigger than expected decrease by the headline index partly reflected a steep drop by the expectations index, which plunged to 63.2 in November from 71.8 in October.

The Conference Board noted the expectations index has tracked below 80 for ten consecutive months, the threshold under which the gauge signals recession ahead.

The report said the present situation index also slumped to 126.9 in November from 131.2 in October, as consumers were less sanguine about current business and labor market conditions.

"Consumers' write-in responses pertaining to factors affecting the economy continued to be led by references to prices and inflation, tariffs and trade, and politics, with increased mentions of the federal government shutdown," said Peterson.

"Mentions of the labor market eased somewhat but still stood out among all other frequent themes not already cited," she added. "The overall tone from November write-ins was slightly more negative than in October."

A separate report released by the University of Michigan last Friday showed consumer sentiment in the U.S. deteriorated by slightly less than previously estimated in November, partly reflecting the end of the government shutdown

The University of Michigan said its consumer sentiment index for November was upwardly revised to 51.0 from the preliminary reading of 50.3. Economists had expected the index to be upwardly revised to 50.5.

The consumer sentiment index is still down from 53.6 in October and remains at its lowest level since hitting a record low of 50.0 in June 2022.

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