A monthly measure of consumer confidence has retreated on less upbeat expectations for business and labor conditions.
While the Consumer Confidence Index remains at historically strong levels, lower readings could signal slowing growth.
The Conference Board reported its Consumer Confidence Index fell 2.2 points to 135.7 in November. While a component of the index tracking consumer assessments of current conditions edged up, a component measuring expectations dropped.
“Consumers’ assessments of current conditions increased slightly with job growth the main driver of improvement. Expectations, on the other hand, weakened somewhat in November primarily due to a less optimistic view of future business conditions and personal income prospects,” said Lynn Franco, senior director of economic indicators at the Conference Board. “Overall, consumers are still quite confident that economic growth will continue at a solid pace into early 2019. However, if expectations soften further in the coming months, the pace of growth is likely to begin moderating.”
The business research and membership group bases the index on the results of monthly household surveys. Economists monitor the index because consumer spending accounts for more than two-thirds of economic activity in the country.
For November, more optimistic assessments of current business and labor conditions pushed the present situation component of the index up eight-tenths of a point to 172.7.
The proportion of consumers responding to the survey upon which the November was based who described business conditions as “good” inched up two-tenths of a point to 41.2 percent. The share of those who characterized conditions as “bad” rose 1.5 points to 10.9 percent.
The proportion of consumers who said jobs were “plentiful” rose 1.2 points to 46.6 percent. The share of those who said jobs were “hard to get” fell 1.2 points to 12.2 percent.
The expectations component of the index declined 4.1 points to 111.
The share of consumers who said they expect business conditions to improve over the next six months fell 3.8 points to 22.5 percent. The proportion of those anticipating worsening conditions rose 1.6 points to 8.8 percent.
The share of consumers who said they expect more jobs to become available in coming months rose a half point to 22.8 percent. The proportion of those expecting fewer jobs also increased a half point to 11.1 percent.
While 21.5 percent of consumers said they expect their incomes to increase, down 3.2 points, another 7.8 percent said they expect to earn less, down four-tenths of a point.