Consumers Less Optimistic as Pandemic, Economy Take Toll

By Kerry Smith

While Americans’ view of present conditions changed little, a slowing economy and growing pandemic fears seem to be giving them a bit less hope for early 2021.

BOSTON – After a flat reading in October, the Conference Board Consumer Confidence Index declined this month from 101.4 (October) to 96.1 (November).

The Present Situation Index – consumers’ assessment of current business and labor market conditions – decreased slightly from 106.2 to 105.9. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined a bit more, from 98.2 in October to 89.5 this month.

“Consumer confidence declined in November, after remaining virtually flat in October,” says Lynn Franco, senior director of economic indicators at The Conference Board. “Consumers’ assessment of present-day conditions held steady, though consumers noted a moderation in business conditions, suggesting growth has slowed in Q4.”

In 2021, “consumers do not foresee the economy, nor the labor market, gaining strength,” Franco adds. “In addition, the resurgence of COVID-19 is further increasing uncertainty and exacerbating concerns about the outlook.”

Current conditions: Consumers’ appraisal of current conditions was relatively unchanged in November. The percentage claiming business conditions are “good” declined from 18.6% to 17.6%, but those claiming business conditions are “bad” also decreased – from 34.4% to 33.5%.

Their assessment of the labor market was unchanged. The percentage saying jobs are “plentiful” held steady at 26.7%, while those claiming jobs are “hard to get” was almost unchanged at 19.5%.

Future expectations: Consumers, however, have grown less optimistic about the short-term outlook six months in the future. The percentage expecting business conditions to improve decreased from 36.0% to 27.4%, while those expecting business conditions to worsen increased from 15.9% to 19.8%.

Consumers’ optimism about the job market also weakened. The proportion expecting more jobs in the months ahead declined from 32.0% to 25.9%, while those anticipating fewer jobs increased moderately from 19.8% to 20.5%.

Regarding short-term income prospects, the percentage of consumers expecting an increase was virtually unchanged at 17.6%, but the proportion expecting a decrease declined from 14.2% to 13.3%.

The monthly Consumer Confidence Survey is conducted for The Conference Board by Nielsen. The cutoff date for preliminary results was Nov. 13.

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