Consumer Confidence Takes a Hit in November
David Kelly, the chief global strategist at JPMorgan Asset Management, offers his insights on the economy, American exceptionalism, and the nuances of “making money.”
In a surprising turn, stock prices dropped more than expected in November, reaching their lowest point since spring, as indicated by the Conference Board’s latest report.
The consumer confidence index decreased to 88.7 in November, compared to a revised 95.5 in October. This was notably below the anticipated figure of 93.4, suggesting a more somber outlook.
“When we look at consumer feedback, the prevailing concerns center around prices, inflation, trade tariffs, and political issues. The looming federal government shutdown also weighs heavily on their minds,” commented Dana Peterson, the chief economist at the Conference Board.
Almost 25% of American households are teetering on the brink financially.
“While mentions of the labor market have decreased, they’re still a prominent theme among other topics that didn’t come up often. Overall, the tone of responses in November feels a bit more negative than in October,” Peterson added.
Consumer confidence has been on a downward trend across most income levels. Interestingly, those earning below $15,000 were the only group to report a slight uptick in confidence, yet they still remain the least secure regarding their financial outlook.
Moreover, the steepest drop in confidence was noted among independent voters. Age-wise, younger consumers under 35 showed improved confidence, but those above that age—especially those aged 55 and older—exhibited the most pessimism.
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This report also highlights consumer expectations for inflation. The base forecast for next year has risen in November, with the median now at 4.8%.
The Conference Board’s Expectations Index has been below 80 for ten consecutive months, which some interpret as an indicator of a potential recession on the horizon.
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All three facets of the expectations index deteriorated this month, revealing a significant increase in pessimism regarding economic conditions six months down the line.
The current situation index similarly declined, with consumers expressing greater concern about present business and labor market situations.
“The drop in consumer confidence was quite stark, with Americans feeling anxious about government shutdowns, elevated prices, and ongoing inflationary pressures. The political climate appears to be a significant factor contributing to this decline,” explained Eugenio Aleman, chief economist at Raymond James. “This aligns with predictions of weaker consumer demand for the last quarter of the year.”
“The weaknesses in various economic indicators like this point might compel the Fed to consider cutting rates in December and potentially lowering them further in 2026,” remarked Jeffrey Roach, chief economist at LPL Financial.
