Consumer confidence inched down in November to 109.5, the lowest since March, as inflation continued to take its toll, according to a report from the Conference Board on Tuesday.
Now, with the emergence of the omicron variant of the coronavirus, which is not reflected in the November data, consumer confidence is likely to come under even more pressure.
The recent declines come after the headline confidence index reached its pre-pandemic peak in April as the economy reopened, only to plummet because of high prices and the delta variant.
Consumers are less confident in the present state of the economy and more pessimistic about the future, as the present situation and expectation subindexes showed with declines to 142.5 and 87.6, respectively.
Still, there is a bright spot in the report: The labor differential subindex—a leading indicator for monthly employment—rose significantly to 46.9 from 43.8 in the prior month.
Together with major downside surprises in the recent jobless claim numbers in November, we should expect the data on employment, which will be released on Friday, to continue to improve on the month.
High inflation also put pressure on spending intention, as survey respondents indicated fewer purchasing plans over the next six months for houses, automobiles and major household appliances.
Expect consumer confidence to take a hit next month as concerns about the new COVID-19 variant start to materialize.