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Consumer Confidence Rebounds in November

Low gas prices spur optimism

November 25, 2008

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Buoyed by rapidly falling gasoline prices, consumers are feeling a lot better this month than they were last month. The Conference Board's index of consumer confidence rose to 44.9 percent in November.

However, that's the second-lowest level on record. The only worse month was October, with an index of 38.8.

The Present Situation Index decreased to 42.2 from 43.5 last month while the Expectations Index increased to 46.7 from 35.7 in October.

"The persistent declines in the Present Situation Index suggest that the economy has weakened further in the final months of this year," said Lynn Franco, Director of The Conference Board Consumer Research Center. "Inflation expectations, which have been at historically high levels in recent months, subsided considerably as a result of falling gas prices. But, despite the improvement in the Expectations Index this month, consumers remain extremely pessimistic and the possibility that economic growth will improve in the first half of 2009 remains highly unlikely."

Consumers' assessment of current conditions deteriorated further in November. Those claiming business conditions are "bad" increased to 40.3 percent from 37.1 percent, while those claiming business conditions are "good" edged up to 9.9 percent from 9.4 percent last month. Consumers' assessment of the labor market was more negative than a month ago. Those saying jobs are "hard to get" rose to 37.2 percent from 36.6 percent in October, while those claiming jobs are "plentiful" decreased to 8.8 percent from 9.0 percent.

Consumers' short-term outlook was less pessimistic. Those anticipating business conditions to worsen over the next six months declined to 28.1 percent from 36.5 percent, while those expecting conditions to improve rose to 11.4 percent from 9.6 percent. The outlook for the labor market was also less negative.

The percent of consumers anticipating fewer jobs in the months ahead declined to 33.3 percent from 41.5 percent, while those expecting more jobs increased to 9.2 percent from 7.3 percent. The proportion of consumers anticipating an increase in their incomes increased to 13.3 percent from 11.1 percent.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for November's preliminary results was November 18th.

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