Consumers Hedge on Confidence

Don Hogsett, December 4, 2006

Raising some questions about December holiday spending, consumer confidence fell for a second straight month in November as Americans continued to fret about a softer job market and an uncertain short-term outlook for the broad economy.

The widely watched bellwether of consumer sentiment and future spending slipped by 2.1% during November, backing off to a reading of 102.9, down from 105.1 in October, The Conference Board reported.

Confidence levels have fallen by 2.8% over the past two months, from 105.9 in September, and are now down 6.3% from a 13-month high of 109.8 recorded in April. Even with the most recent slide, the confidence level is still roughly at the mid-point of its 13-month range and is 4.7% above a low point of 98.3 in November 2005.

"A tighter labor market and a more guarded short-term outlook have combined to curb consumers' confidence in November," said Lynn Franco, director of the business think tank's Consumer Research Center. "Despite this retreat in confidence, the overall level of confidence remains favorable and continues to suggest that the economy will expand throughout the first half of next year."

Acting as a damper last month, consumers' appraisal of current business conditions was less positive. The number who said conditions are good declined to 26.5% from 27.9% the prior month. Labor market conditions were also viewed less favorably, with the number of consumers who said jobs are hard to get rising to 22.4% from 21.8%.


Region % change
Source: The Conference Board
New England 29.0%
Middle Atlantic -6.8
East North Central -17.6
West North Central 1.2
South Atlantic 1.9
East South Central -0.5
West South Central -3.8
Mountain -3.3
Pacific -3.3

Plans to purchase over the next six months

Source: The Conference Board
Homes -3.2%
Carpets 2.3
Cars -13.5
Major appliances 1.4
Vacation 7.2

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