The Consumer Confidence Index (CCI) fell for the fourth consecutive month in November to 100.2 from 102.2 in October. The data published by The Conference Board represents a setback that adds to the decline already recorded in October. According to Lynn Franco, Senior Director of Economic Indicators at the organization:
Consumer confidence declined again in November, most likely prompted by the recent rise in gas prices.
The decrease in confidence was prominent in the group of people aged 55 and older. It was also prevalent among households with annual incomes below $50,000. There were notable decreases in states such as Pennsylvania, Ohio and Michigan, which offset increases in Texas, New York, Florida and Illinois.
CCI at historic lows
In June, a University of Michigan survey of consumer confidence registered the lowest level in history, even worse than that of the late 1970s or the 2008 crisis. Christos Makridis in Fortune pointed out the importance of consumers' feelings about the economy, as these are what determine the actions they will take regarding their finances:
It reflects our attitudes about the current state of the economy and expectations about its trajectory. And, by all accounts, consumer sentiment is at record lows, and its decline has been more protracted than during past dips.
Current Situation Index
Consumer inflation expectations rose in November to a high of 7.2% compared to 6.9% in October, which is attributed to higher gasoline and food prices. According to Lynn Franco, the organization's Senior Director of Economic Indicators:
Inflation expectations rose to their highest level since July. The combination of inflation and interest rate increases will continue to pose challenges to confidence and economic growth through early 2023.
The Current Situation Index, which is based on consumers' assessment of business and labor conditions, decreased to 137.4 points in November compared to 138.7 points last month. The Expectations Index, which is the result of consumers' short-term outlook on income, business and labor market conditions, fell to 75.4 compared to 77.9 points in the same months:
The Present Situation Index moderated further continues to suggest that the economy has lost momentum as the year winds down. Consumers' expectations regarding the short-term outlook remained gloomy. In fact, the Expectations Index is below a reading of 80, which suggests the likelihood of a recession remains elevated.
The decline in purchase intentions occurred across the board.