U.S. consumer confidence surprisingly fell to the lowest level in five months in November as folks voiced dimmer view of the labor market and the economy.
The Conference Board’s index plunged to 88.7 this month, compared with 94.1 in October, which was the highest level since October 2007. This halts an increase in confidence since the end of the first half of this year. Though sentiment has declined, spending plans rose, signaling reduced fuel costs and robust job growth may fuel consumer spending.
“The drop this month doesn’t change our view that the trend in consumer confidence is moving upwards,” David Kelly, a New York-based chief global strategist at JPMorgan Funds, told Bloomberg News. “Gasoline prices are down, the unemployment rate is down, home prices are gradually rising, and stock prices are certainly rising.”
Economists in a Bloomberg poll had expected a measure of 96, up from 94.5 in October. The Conference Board’s six-month gauge of consumer expectations fell from 93.8 to 87 this month.
An index of present conditions touched the lowest level in four months of 91.3 from 94.4. The proportion of Americans who viewed business climate as good fell to 24 percent, a three-month low.
Most Americans plan to purchase new appliances such as washing machines, vacuum cleaners, televisions, over the next six months. Buying plans also increased for used cars and for homes.
However, other measures of sentiment rose, with the Thomson Reuters/University of Michigan initial November index touching the highest level in seven years, while the Bloomberg Consumer Comfort Index touched the strongest level since January 2008. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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