November 29, 2022 | 10:58
Consumer Sentiment Slides in November
U.S. consumer confidence fell 2.0 points to a four-month low of 100.2 in November. That’s the second straight monthly drop amid still-high inflation and rising risks of a recession. Views about the 'present situation' fell 1.3 points to 137.4, hitting the lowest level since April 2021. Meantime, inflation expectations (12 months ahead) continued to edge higher, up 7.2% from 6.9% in the prior month. Although the latest CPI report showed annual core price growth eased from 40-year highs, shelter costs still galloped 0.8% m/m—the most since 1990.
On the employment front, 45.8% of respondents agreed that “jobs remain plentiful”, up from the prior month’s 44.8%. Meantime, the share who found “jobs hard to get” held steady at 13%. On net, the labor differential improved slightly to 32.8%, after hitting a 1½ -year low of 31.8 in October.
Plans to make large purchases in the next 6 months retreated across the board. That’s good news for the Fed trying to dampen demand and restore price stability. While households have, so far, proven to be more resilient than expected amid a strong job market and excess savings, inflationary pressures will continue to pose major headwinds to consumer sentiment and spending plans.
In a separate report earlier today, the S&P Case-Shiller 20-city composite index showed the U.S. housing market sputtered further in September, with prices falling 1.2% m/m. That was the third straight decline as higher borrowing costs continue to push aside potential buyers and slow demand. And, while annual price growth is still holding in the double-digits, up 10.4% y/y, it’s slowing pretty quickly, and is down from the above-20% growth seen earlier this year.
Bottom Line: Consumer confidence, as measured by the Conference Board, wilted again in November amid fears of a looming recession, surging borrowing costs, and high inflation.