American consumers felt slightly less confident in November due to price increases and rising Covid 19 infections, according to an industry survey released Tuesday.
The Conference Board reported that its consumer confidence index dropped by two points to 109.5 this month, worse than analysts had predicted as the world's largest economy struggles with record inflation and still high Covid 19 infection rates.
The research group's Senior Director of Economic Indicators, Lynn Franco, said the decline doesn't necessarily bode ill for the economy's recovery into next year, nor for the holiday shopping season.
The Conference Board believes that this will be a good holiday season for retailers, and confidence levels suggest that the economic expansion will continue into early 2022, she said.
There are going to be a lot of headwinds from rising prices and a potential resurgence of Covid-19 in the coming months, which will likely cause confidence and spending to suffer. Recent data showing robust hiring showed that the labor market perception improved, with 58 percent of people describing their jobs as plentiful, about three percentage points higher than October, while the number describing them as hard to get was static.
The data shows the impact of the inflation wave that saw consumer prices make their biggest jump in more than 30 years last month.
The number of people describing business conditions as good declined by about a point to 17 percent, while the number of people describing them as bad rose more than three points to 29 percent.
Consumers were not interested in buying appliances, homes, or particularly cars, which fell more than three percentage points as a result of a surge in used automobile prices.
Consumers were less optimistic about their short-term outlook for the labor market and business conditions.
According to the data, there was a slight increase in the number of people expecting fewer jobs and a slight decrease in those expecting more. More people expected their income to decrease, while fewer expected it to increase, both by amounts under one percent.
The report showed that more people were feeling optimistic about the state of the economy in the months to come, with the number of consumers expecting business conditions to improve to 24.1 percent from 22.7 percent in October.