Consumer confidence was tripped up by inflation in November and tumbled to the worst level in nine months, data released Tuesday show.
The index of consumer confidence dropped to 109.5 from 111.6 in October, when confidence had risen, the Conference Board said Tuesday. This is the fourth decline in the past five months.
Economists had expected a gentler decline to 110, so this was worse than expected.
“Concerns about rising prices — and, to a lesser degree, the Delta variant — were the primary drivers of the slight decline in confidence,” said Lynn Franco, senior director of economic indicators at the board.
Consumers’ view of current business conditions dimmed in November, although the share saying jobs were plentiful picked up to 58 percent from 54.8 percent a month ago. Only 17 percent of consumers say business conditions are good, down from 18.3 percent a month earlier. Twenty-nine percent say business conditions are bad, up from 25.7 percent in October.
When it comes to the future, however, consumer views were flipped. Consumers became more optimistic about future business conditions, with those expecting improvement rising to 24.1 percent from 22.7 percent. But the share anticipating more jobs in the months ahead fell to 22.1 percent from 24.4 percent.
Consumers’ optimism about the short-term business conditions outlook increased in November.
When it comes to household finances, 17.9 percent of consumers expect their incomes to increase, down from 18.4 percent. Twelve percent expect their incomes to fall, an increase from 11.2 percent a month ago.
“Meanwhile, the proportion of consumers planning to purchase homes, automobiles, and major appliances over the next six months decreased. The Conference Board expects this to be a good holiday season for retailers and confidence levels suggest the economic expansion will continue into early 2022. However, both confidence and spending will likely face headwinds from rising prices and a potential resurgence of COVID-19 in the coming months,” Franco said.