Consumer Confidence Up Slightly, But Recession Fears Persist

By at 28 November, 2023, 9:45 pm

by Raymond J. Keating –

The latest report on consumer confidence from the Conference Board pointed to a small uptick in November.

The index registered 102.0 (1985=100), which was up from 99.1 in October, which had been revised down.

However, as the Conference Board noted, this was hardly a clear improvement in consumer views: “The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – ticked down slightly to 138.2 (1985=100), from 138.6. The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – rose to 77.8 (1985=100) in November, up from its downwardly revised reading of 72.7 in October.”

The Expectations Index remaining below 80 means that consumers are still expecting a recession in the coming year.

At the same time, though, those recession fears have abated “to the lowest levels seen this year.” Such movement is most welcome. However, as reported, “around two-thirds of consumers surveyed in November still perceive a recession to be ‘somewhat’ or ‘very likely’ to occur over the next 12 months.”

Dana Peterson, chief economist at The Conference Board, highlighted an interesting point: “November’s increase in consumer confidence was concentrated primarily among householders aged 55 and up; by contrast, confidence among householders aged 35-54 declined slightly.”

Especially as we delve deeper into the Christmas holiday shopping season, measures of consumer attitudes come into greater focus, and justifiably so. At the same time, it should be kept in mind that surveys of consumer attitudes and actual consumer actions can, and often do, diverge. So, this measure of consumer confidence must be placed alongside other measures of economic activity in order to get a full picture of the state of our economy.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist and The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist.


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