Consumer Confidence & Spending
The latest data released from The Conference Board shows that consumer confidence in the economy fell in November, “dragged down by greater concerns about hiring and pay in the coming months.” Consumer confidence reached its lowest level in seven months.
Conference Board data indicates that the Consumer Confidence Index (CCI), fell from 72.4 in October to 70.4 in November. The CCI has fallen almost 10 points in the last three months when it registered 80.2 in September.
The precipitous drop from September to October was attributed to the government shutdown, while November’s decline may be due to consumers looking forward for the next six months.
USA Today noted that since consumer spending drives 70 percent of economic activity, “Less optimism among Americans could slow the holiday shopping season and weigh on economic growth.” However, they stated that despite the CCI decline in October from September consumer spending actually increased slightly in October from the previous month.
Positive data from a Gallup Poll shows consumer spending for November increased over October. Gallup stated that, “Americans spent $91 daily in November, up from $88 a day in October, making it the highest amount for November in the past six years. Gallup noted that its daily spending poll results exclude “normal household bills and major purchases such as homes or cars.” It reported its first measurement of consumers’ daily spending amounts in 2008.”
More from the Gallup data shows that, “November 2013’s $3 daily spending jump from the previous month equals the biggest increase from one month to the next since the fall of 2010, when Americans spent $66 a day in November, up from October 2010’s $63.”
Gallup adds, what most any consumer would expect, by saying that December is traditionally the highest-spending month of the year. They note that the stronger than expected November 2013 consumer results indicate that, “the coming month [December] could be the strongest for spending that Gallup has measured since 2008.”
It is projected that economic growth for the October to November fourth quarter will be around 2.0 percent. This figure will be a decline from the third quarter, July to September, figures of 2.8 percent economic growth.