(Bloomberg) — Consumer confidence unexpectedly declined in November to a five-month low as Americans became less upbeat about the economy and labor market.
The Conference Board’s index fell to 88.7 this month from an October reading of 94.1 that was the strongest since October 2007, the New York-based private research group said today. The figure last month was weaker than the most pessimistic estimate in a Bloomberg survey of economists.
The decline this month interrupts a steady pickup in sentiment since the middle of the year and shows attitudes about the economy would benefit from bigger wage gains. While confidence slipped, buying plans picked up, indicating spending will be sustained on the heels of stronger job growth and lower fuel costs.
The drop this month “doesn’t change our view that the trend in consumer confidence is moving upwards,” said David Kelly, chief global strategist at JPMorgan Funds in New York. “Gasoline prices are down, the unemployment rate is down, home prices are gradually rising, and stock prices are certainly rising.”
The median forecast of 75 economists in the Bloomberg survey called for a reading of 96, with estimates ranging from 93.5 to 99 after a previously reported October index of 94.5. The Conference Board’s measure averaged 96.8 during the last expansion and 53.7 during the recession that ended in June 2009.
Stocks fell after the report, with the Standard & Poor’s 500 Index dropping 0.1 percent to 2,068.13 at 10:45 a.m. in New York.
The Conference Board’s index of consumer expectations for the next six months decreased to 87 this month from 93.8.
The gauge of present conditions barometer dropped to a four-month low of 91.3 from 94.4. The share of Americans who said business conditions were good decreased to 24 percent, the lowest in three months.
While Americans were feeling less upbeat this month, they also indicated they’re ready to spend more, according to the Conference Board’s figures. More said they planned to buy new appliances, including televisions, vacuum cleaners and washing machines, within the next six months. Buying plans also rose for homes and used cars.
Today’s report is at odds with other readings on sentiment. The Thomson Reuters/University of Michigan preliminary November gauge reached a seven-year high, while the weekly Bloomberg Consumer Comfort Index rose last week to the highest level since January 2008. Labor Market
The Conference Board’s data showed Americans’ assessments of current and future labor-market conditions weakened. The share of Americans who said jobs were currently plentiful fell to 16 percent from 16.5 percent. The share that said jobs were hard to get was little changed at 29.2 percent after 29 percent in October.
A smaller number of consumers expected more jobs to become available in the next six months as the share fell to 15 percent from 16 percent.