By Eve Fan
Consumer confidence in the U.S. declined unexpectedly in November to the lowest level in a year, as Americans became gloomier about jobs and the labor market.
The non-profit Conference Board said Tuesday that its Consumer Confidence Index fell to 90.4 from 99.1 in October, missing the economists’ consensus estimate of 99.5, according to Bloomberg LP.
The board’s index that measures the present situation fell to 108.1 from 114.6 in October, while the expectations index fell to 78.6 from 88.7. The survey was based on results collected by Nov. 12.
“The decline was mainly due to a less favorable view of the job market,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ appraisal of current business conditions, on the other hand, was mixed. Fewer consumers said conditions had improved, while the proportion saying conditions had deteriorated also declined.”
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Those who thought jobs are “hard to get” increased to 26.2 percent from 24.6 percent, while those who thought jobs are “plentiful” fell to19.9 percent from 22.7 percent last month.
“Heading into 2016, consumers are cautious about the labor market and expect little change in business conditions,” Franco said.
Americans expecting business conditions to improve in the coming six months decreased to 14.8 percent from 18.1 percent. Those who expect their incomes to increase fell to 17.2 percent from 18.1 percent.
The drop in consumer confidence may be bad news for retailers heading into the critical holiday selling season, but some economists suggest looking beyond November’s results.
“I think the labor market continues to improve. The average job growth should remain around 200,000 for the foreseeable future, some months a little less, some months a little more,” Robert Stein, deputy chief economist at First Trust Advisor LP, said during an interview. “I would strongly caution anyone about reading too much into a one-month consumer confidence survey.”
Stein said his firm is predicting November’s unemployment rate, to be released Dec. 4, will remain at about 5 percent. Stein expects the jobless rate to continue on a downtrend to 4.5 percent by late 2016 or mid-2017.
Economists surveyed by Bloomberg expect a 5 percent unemployment rate in November and a rise in non-farm payroll employment of 200,000, compared with a 271,000 increase in October.