Consumers became less confident in the economy in November amidst the Thanksgiving holiday and rising COVID-19 cases.
The Conference Board, a business research organization, said that their index measuring consumer confidence fell to 96.1 this month, down from 101.4 in October. The group also notes that the Present Situation Index, based on consumers’ assessment of current market and labor market conditions – decreased slightly from 106.2 to 105.9.
Consumers who felt that business conditions were “good” declined by roughly a percentage point, down to 18% in November. Consumers who felt that business conditions were “bad” also declined from 34% to 33%.
Consumers do not expect that conditions will get much better any time soon. Only 27% of consumers believe that business conditions will improve over the next six months, down from 36% in October. Those who believe that business conditions will worsen over the next six months jumped to 20%, up from 15% in October.
Customer views on the labor market remained the same, with 27% saying that jobs were “plentiful” and 19% saying “jobs were hard to get.” Much like with business conditions, consumers hold little optimism for the future. Only 26% of consumers expect more jobs in the months ahead, a decline from 32% in October. Meanwhile, 20% of consumers expect fewer jobs, a very slight increase from 19.8% in October.
Experts believe that rising coronavirus cases fueled the index’s decline.
“Heading into 2021, consumers do not foresee the economy, not the labor market, gaining strength,” said Lynne Franco, director of economic indicators at the Conference Board. “In addition, the resurgence of COVID-19 is further increasing uncertainty and exacerbating concerns about the outlook.”
Coming on the heels of historic stock market highs, the index is sending mixed signals as the economy has shown improvement with employees slowly return to work. However, states have seen a rise in initial jobless claims as retail sales and jobs continue to lag.
Meanwhile, some states have responded to rising coronavirus cases by reinstating restrictions, albeit lighter than those issued earlier in the year.
On Nov. 24, the Wall Street Journal reported that consumers had tightened their spending habits referencing OpenTable data, a restaurant reservation application, which shows seating volume at its lowest since August.