Inflation hits US consumer confidence in November

WASHINGTON: Price increases and rising Covid-19 infections made US consumers feel slightly less confident in November, an industry survey released Tuesday said.

The Conference Board reported its consumer confidence index dropped about two points to 109.5 this month, worse than analysts had forecast as the world's largest economy grapples with record inflation and still-high Covid-19 infection rates.

But the research group's Senior Director of Economic Indicators Lynn Franco said the decline doesn't necessarily bode ill for the economy's recovery into next year, nor for the holiday shopping season.

"The Conference Board expects this to be a good holiday season for retailers, and confidence levels suggest the economic expansion will continue into early 2022," she said.

"However, both confidence and spending will likely face headwinds from rising prices and a potential resurgence of Covid-19 in the coming months."

Amid recent data indicating robust hiring, perceptions of the labor market improved, with 58 percent of people describing jobs as plentiful, about three percentage points higher than October, while the number describing them as "hard to get" was static.

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However, the impact of the inflation wave that saw consumer prices make their biggest jump in more than 30 years last month was apparent in the data.

The number of people describing business conditions as "good" declined about a point to 17 percent, while those describing them as "bad" rose more than three points to 29 percent.

There were also declines among consumers in plans to buy appliances, homes and particularly cars, which fell more than three percentage points amid a surge in used automobile prices.

Consumers were also less optimistic about their short-term outlook for the labor market and business conditions.

There was a slight uptick in the number of people expecting fewer jobs and a slight decrease in those expecting more, according to the data. More people also expected their income to decrease, while fewer expected it to increase, both by amounts under one percent.

Nonetheless, the report indicated more people were feeling optimistic about the state of the economy in the months to come, with the number of consumers expecting business conditions to improve rising to 24.1 percent from 22.7 percent in October.