In November American consumer confidence dropped to its lowest level since June, with people showing less optimism about the US economy and jobs.
The index now stands at 88.7, down from 94.1 in October, according to a report conducted for The Conference Board by Nielsen.
Economists had expected a November reading of 96.0, according to a poll conducted by Reuters.
Says Lynn Franco, Director of Economic Indicators at The Conference Board, said:
“Consumer confidence retreated in November, primarily due to reduced optimism in the short-term outlook. Consumers were somewhat less positive about current business conditions and the present state of the job market; moreover, their optimism in the short-term outlook in both areas has waned.”
Adding:
“However, income expectations were virtually unchanged and gas prices remain low, which should help boost holiday sales.”
The assessment of present-day conditions also dropped in November.
The percent saying business conditions are “good” fell from 24.7 percent in October to 24.0 percent in November, and those claiming business conditions are “bad” climbed up from 21.3 percent in October to 22.4 percent in November.
The assessment of the job market was also less favorable. The percent of people saying that jobs are “plentiful” fell from 16.5 percent in October to 16.5 percent in November.
Many economists say that confidence will quickly rebound given the large decline in gas prices, which is likely thought to boost consumer confidence as it will allow them to spend more money on other items.