Unexpected improvement in consumer confidence in November

11-25-2009 09:20

Consumer confidence in November improved unexpectedly, according to today’s figures by the Conference Board, as consumers were more optimistic about the employment and business environment prospects.

Unexpected improvement

The consumer confidence index climbed to 49.5 in November, in comparison to an upwardly corrected 48.7 in the previous month. The rise came unexpectedly, as economists had forecasted the index to drop to 47.5 from 47.7 in October. At the same time, the expectations index climbed to 68.5 from the 67.0 reported for the previous month, while in November the current situation index dropped to a twenty-six year record low of 21.0, in comparison to 21.1 in October.

Consumer confidence

“The short-term prospects improved modestly, as less consumers expect labor market circumstances and business environment to deteriorate, while more consumers expect the labor market circumstances and the business environment to progress,” Lynn Franco, Director of the Conference Board Consumer Research Center, commented.

Present conditions

Consumers’ appraisal of the present conditions was nearly the same in November. The percentage of consumers considering the conditions as “bad” fell to 45.7 in contrast to 46.7 in October, while the percent of consumers considering the circumstances as “good” climbed to 8.1% in comparison to 7.8% in October.

Labor market

However, consumers' assessment of the labor market worsened slightly. The percentage of consumers considering jobs as “hard to get” climbed to 49.8% this month in comparison to 49.4 in the previous month, while the percent of consumers considering jobs as “plentiful” dropped to 3.2% in contrast to 3.5% in October.

Business environment

The Conference Board stated that the percent of consumers expecting the business environment to deteriorate during the next half year dropped to 15.1% this month as opposed to 18.2% in the previous month. At the same time, the percentage of consumers expecting the conditions to improve also dropped to 20.0% in comparison to 20.8 in October.

Employment prospects

The labor market prospects also improved moderately, with the percent of consumers expecting decreased employment declining to 23.1% this month in comparison to 26.1% in October, while those expecting improved employment also dropped to 15.2% in contrast to 16.8% in the previous month.
Furthermore, the report demonstrated that the percent of consumers expecting their incomes to rise declined to 10.0% this month in comparison to 10.7% last month.