As the crucial holiday shopping season gains momentum, American consumers are displaying a slightly improved sense of confidence.
On Tuesday, The Conference Board, a business research group, announced that its consumer confidence index increased to 102, up from October’s 99.1. Analysts had anticipated a reading of 101. It’s worth noting that the October reading was revised downward from its initial 102.6.
This index assesses both Americans’ evaluations of current economic conditions and their expectations for the next six months.
The index that measures Americans’ short-term outlook for income, business prospects, and the job market rose to 77.8 in November, up from 72.7 in October. This marks the third consecutive reading below 80 for future expectations, a historical signal that a recession may occur within a year.
Consumer spending constitutes approximately 70% of U.S. economic activity, making consumer behavior a closely monitored metric for economists assessing the broader economy.
In September, consumer spending saw a robust increase of 0.4%, even as Americans contend with rising borrowing costs. After a strong summer, economists predict a slowdown in consumer spending during the final three months of the year, driven by increased credit card debt, delinquencies, and decreasing average savings.
In October, Americans did reduce their retail spending, breaking a streak of six consecutive months of growth, although this decline was influenced in part by falling gasoline and car prices.
Despite ongoing spending, inflation, geopolitical tensions, and higher interest rates continue to be top concerns for American consumers.
The view of current economic conditions among consumers experienced a slight decline this month, dropping to 138.2 from October’s 138.6.