Consumer confidence falls in November
WASHINGTON (MarketWatch) - The government shutdown, it turns out, is not the only thing that's undermined the confidence of consumers as retailers enter the most critical part of their year.
The consumer-confidence index fell for the third straight month, dipping to 70.4 in November from 71.2, the nonprofit Conference Board said Tuesday. Economists polled by MarketWatch had expected the index to rise to 72.4, largely because of the end of the budget battle that gripped Washington though the month of October.
Consumers turned somewhat more pessimistic about the availability of jobs and chance of stronger income growth in the next six months, the board said, even though they see little change in their current financial condition.
'When looking ahead six months, consumers expressed greater concern about future job and earning prospects, but remain neutral about economic conditions,' said Lynn Franco, director of economic indicators at the Conference Board.
If consumers have turned more cautious again, it might not bode well for retailers as the holiday season gets underway. The end of the year generates the biggest portion of annual sales for retail stores.
'All in all, with such uncertainly prevailing, this could be a challenging holiday season for retailers,' Franco said.
In November, the present situation index, a barometer of how consumers feel now, dipped to 72.0 from 72.6.
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The future expectations index, which covers the next six months, slipped to 69.3 from 72.2, marking the lowest level in eight months.
Overall, consumer confidence remains well below its historical norm. Readings usually top the 100 mark during a strong phase of economic growth and job creation.
A large part of the reason why the index remains depressed is the sluggish labor market. Although companies have stepped up their pace of hiring in 2013, the unemployment rate remains elevated at 7.3%. What's more, the growth in worker wages is barely staying ahead of inflation.
The U.S. has grow a lot faster and add jobs at a more rapid clip to pull consumer confidence back up to normal levels, economists say.
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