Some good news: the Conference Board Consumer Confidence Index increased in November to 102.0 (1985=100), up from a downwardly revised 99.1 in October.

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—ticked down slightly to 138.2 (1985=100), from 138.6. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—rose to 77.8 (1985=100) in November, up from its downwardly revised reading of 72.7 in October.

Expectations Remain Low

Despite this month’s improvement, the Expectations Index remains below 80 for a third consecutive month—a level that historically signals a recession within the next year. While consumer fears of an impending recession abated slightly—to the lowest levels seen this year—around two-thirds of consumers surveyed in November still perceive a recession to be “somewhat” or “very likely” to occur over the next 12 months. This is consistent with the short and shallow recession we anticipate in the first half of 2024.

“Consumer confidence increased in November, following three consecutive months of decline,” said Dana Peterson, Chief Economist at The Conference Board. “This improvement reflected a recovery in the Expectations Index, while the Present Situation Index was largely unchanged. November’s increase in consumer confidence was concentrated primarily among householders aged 55 and up; by contrast, confidence among householders aged 35-54 declined slightly. General improvements were seen across the spectrum of income groups surveyed in November. Nonetheless, write-in responses revealed consumers remain preoccupied with rising prices in general, followed by war/conflicts and higher interest rates.”

Peterson added: “Assessments of the present situation ticked down in November, driven by less optimistic views on current job availability, which outweighed slightly improved views on the state of business conditions. More consumers said that business conditions were ‘good’ compared to last month, but more also said they were ‘bad.’ Regarding the employment situation, more consumers said that jobs were ‘plentiful’ compared to October, but the number saying jobs were ‘hard to get’ also increased. By contrast, when asked to assess their current family financial conditions (a measure not included in calculating the Present Situation Index), the share reporting ‘good’ rose, and those citing ‘bad’ fell, suggesting consumer finances remain healthy heading into the holiday season.”

“Consumer expectations for the next six months recovered in November, reflecting improved confidence about future business conditions, job availability, and incomes. Compared to last month, expectations that interest rates will rise in the year ahead ticked down, but consumers’ outlook for stock prices continued to weaken in November. Meanwhile, average 12-month inflation expectations receded to 5.7 percent after a one-month uptick to 5.9 percent. Consumers’ views of their expected family financial situation, six months hence (not included in calculating the Expectations Index) recovered in November, after ticking down for the past two months. Buying plans for autos, homes, and big-ticket appliances trended downward on a six-month basis—perhaps reflecting the impact of elevated interest rates.”

Present Situation

Consumers’ assessment of current business conditions was, on balance, slightly more positive in November.

  • 19.8% of consumers said business conditions were “good,” up from 18.3% in October.
  • However, 19.5% said business conditions were “bad,” up from 18.8%.

Consumers’ appraisal of the labor market was mixed in November.

  • 39.3% of consumers said jobs were “plentiful,” up slightly from 37.9% in October.
  • However, 15.4% of consumers said jobs were “hard to get,” up from 14.1%.

In Six Months

Consumers were less pessimistic about the short-term business conditions outlook in November.

  • 17.3% of consumers expect business conditions to improve, up from 15.5% in October.
  • 19.5% expect business conditions to worsen, down from 20.9%.

Consumers’ assessment of the short-term labor market outlook was slightly more optimistic in November.

  • 16.1% of consumers expect more jobs to be available, up from 15.3% in October.
  • 19.6% anticipate fewer jobs, down slightly from 19.7%.

Consumers’ assessment of their short-term income prospects improved in November.

  • 17.2% of consumers expect their incomes to increase, up from 15.6% in October.
  • 12.1% expect their incomes to decrease, down from 13.4%.

Assessment of Family Finances and Recession Risk

  • Consumers’ assessment of their Family’s Current Financial Situation improved in November.
  • Consumers’ assessment of their Family’s Expected Financial Situation, Six Months Hence was also more optimistic in November.
  • Consumers’ Perceived Likelihood of a US Recession over the Next 12 Months decreased in November to the lowest levels seen this year—though two-thirds still expect a downturn.

The monthly Consumer Confidence Survey, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers. The cutoff date for the preliminary results was Nov. 15.

Source: November 2023 Consumer Confidence Survey, The Conference Board