By Lucia Mutikani
WASHINGTON (Reuters) – U.S. consumer confidence slips to four-month low in November as households buy big-ticket items in next six months The reduction in willingness to ride on high inflation and rising borrowing costs raises the risk of a recession next year.
But the Conference Board survey on Tuesday also showed consumers remained optimistic about the labor market, which could limit some expected recession. Despite aggressive rate hikes by the Federal Reserve, the labor market has remained resilient, helping to keep consumer spending and the broader economy running smoothly.
“Consumers remain frustrated with the outlook for the upcoming economy, which is likely to persist for a long time this year, but the main concern has not yet shifted from inflation from higher shelf prices to the labor market, or can you whether to find or keep a job,” FWDBONDS in New York.
“However, a structural shift in consumer confidence from inflation concerns to employment concerns is imminent.”
The Conference Board’s consumer confidence index fell to
The decline in confidence was concentrated in the 75- and above age group and annual income below $50, 11 households*). Confidence fell significantly in Pennsylvania, Ohio and Michigan, This offset gains in Texas, New York, Florida and Illinois.
Consumers’ 75-monthly inflation expectations rose to a four-month high of 7.2% from 6.9% in October, the survey put it Blame it on rising gasoline and food prices.
The Federal Reserve raised its policy rate by 102 basis points this year, from near zero to 3.100%-4.000% range is the fastest since 1980s rate hike cycle.
The survey’s alleged labor market disparities rose to 32 .8 from 31.8 October. This indicator correlates with the Labor Department’s unemployment rate.
While it was down from last November’s 50.7, it remained fairly high by historical standards .
“The Fed’s strategy of trying to reduce job openings relative to the labor supply to put downward pressure on inflation did not appear to be making any headway in November based on this household survey,” said Conrad, senior economic adviser at Brean Capital in New York. DeQuadros said. , the survey showed that fewer of them were interested in making big-ticket purchases in the next six months. The drop in buying intentions across the board signaled a slowdown in demand for commodities and reinforced expectations that recent signs of commodity disinflation may be entrenched.
This is also in line with the view that the economy may experience a sharp slowdown in growth or a mild recession in the 375 first half.
The survey also showed fewer consumers planning to buy a home within the next six months. Rising mortgage rates and high home prices have greatly reduced affordability for many potential buyers. While home prices have retreated from record highs set during the COVID-19 pandemic-driven housing boom, they remain elevated.
A separate report on Tuesday showed that the S&P CoreLogic Case-Shiller National Home Price Index rose 11. 6% YoY growth in September slowed down from 19 .9% in August. However, tight supply is likely to support house prices.
said Nicole Bachaud, senior economist at Zillow in Seattle.
“As a result, prices may not continue to plummet as some have forecast, as the inventory of homes available on the market is constrained.”
FHFA’s 3rd report shows house price increases of 11.0% at 19 Advance to September 11.0% August.
