Written by Steven Hansen
The latest Conference Board Consumer Confidence Index’s headline number declined in November, after remaining relatively flat in October. The Index now stands at 96.1 (1985=100), down from 101.4 (an upward revision) in October. A quote from the Conference Board: “Consumers’ assessment of present-day conditions held steady, though consumers noted a moderation in business conditions, suggesting growth has slowed in Q4“.
Analyst Opinion of Conference Board Consumer Confidence
Consumer confidence had been steady for the previous two years – but the coronavirus killed the upswing. Consumer confidence is as low as seen in 2014.
The consensus range from Econoday was 77.0 to 82.0 (consensus 77.7). This month’s index is based on data collected through 16 October 2020.
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Per Lynn Franco, Director of Economic Indicators at The Conference Board:
Consumer confidence declined in November, after remaining virtually flat in October. Consumers’ assessment of present-day conditions held steady, though consumers noted a moderation in business conditions, suggesting growth has slowed in Q4. Heading into 2021, consumers do not foresee the economy, nor the labor market, gaining strength. In addition, the resurgence of COVID-19 is further increasing uncertainty and exacerbating concerns about the outlook.
Caveats Relating to CB Consumer Confidence
From the Conference Board:
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch.
Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90 percent of the world’s population. For more information, visit www.nielsen.com.
From Econoday:
The Conference Board compiles a survey of consumer attitudes on the economy. The headline Consumer Confidence Index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months hence regarding business conditions, employment, and income. Three thousand households across the country are surveyed each month. In general, while the level of consumer confidence is associated with consumer spending, the two do not move in tandem each and every month.
Consumer confidence and retail sales generally move in tandem but not necessarily each and every month. Note that consumer assessments of employment conditions are heavily weighted in the consumer confidence index.
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