By CHRISTOPHER RUGABER
U.S. shopper confidence fell for the second straight month in November amid ongoing excessive inflation, rising rates of interest, and layoffs within the tech sector.
The Conference Board reported Tuesday that its shopper confidence index fell to 100.2 this month, down from 102.2 in October. November’s determine is the bottom since July, and sure mirrored an uptick in fuel costs earlier this fall, mentioned Lynn Franco, senior director of financial indicators on the Conference Board.
Gas costs have since reversed and fell to $3.52 a gallon, on common, nationwide on Tuesday, based on AAA. That’s down from $3.76 a month in the past.
The knowledge point out Americans are taking a extra gloomy view in regards to the economic system. Before the pandemic, the index often topped 120. With the price of meals, lease, clothes, and different necessities surging, inflation is close to the worst in 4 a long time, rising 7.7% in October from a 12 months earlier.
Despite the damaging outlook, nevertheless, most Americans — notably these with greater incomes — are nonetheless spending, fueling a usually wholesome begin to the winter vacation purchasing season final weekend.
The enterprise analysis group’s current state of affairs index — which measures customers’ evaluation of present enterprise and labor market situations — dropped barely to 137.4 from 138.7 in October.
And the board’s expectations index — a measure of customers’ six-month outlook for revenue, enterprise and labor situations — declined to 75.4 from 77.9 final month.
Still, Americans opened their wallets on Black Friday and over the post-Thanksgiving weekend. Spending on Black Friday jumped 12% in contrast with a 12 months in the past, based on MasterCard Spending Pulse, although that determine just isn’t adjusted for inflation.
And on so-called “Cyber Monday” earlier this week Americans boosted their on-line spending by 5.8% from a 12 months earlier, Adobe Analytics mentioned.
Consumers could not have the ability to maintain strong spending progress for for much longer. A rising variety of households are stepping up their use of bank cards — or “buy now, pay later” plans — to maintain up with greater costs. And many are additionally dipping into financial savings, which rose sharply — on common — in the course of the pandemic, as authorities stimulus checks and the postponement of spending on journey and leisure boosted the common American’s checking account.
Yet for lower-income households, these financial savings have largely been spent, although they might proceed to gasoline exercise for higher-earning households.
Rising shopper spending, even after adjusting for inflation, is anticipated to buoy the economic system within the remaining three months of 2022. Next 12 months, nevertheless, many economists count on escalating rates of interest, still-high costs, and a cooling job market to weigh on the economic system, probably even tipping it into recession.
Source: www.bostonherald.com”