Rising inflation dampens consumer confidence

December 1, 2021:  U.S. consumer confidence dropped to a nine-month low in November amid worries about the rising cost of living and pandemic fatigue, but that did not change expectations for stronger economic growth this quarter.

The survey from the Conference Board on Tuesday showed consumers less enthusiastic about buying a house and big-ticket items such as motor vehicles and major household appliances over the next six months, likely because of shortages, which have boosted prices. Consumers held strong views of the labor market, with the gap between those saying jobs are plentiful versus hard to get widening to a record high.

"This isn't a cause for concern as the relationship between spending and sentiment is loose, particularly in the short-run," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. "The good news is that consumers' assessment of the labor market improved in November, pointing toward a further acceleration in job growth."

The Conference Board said its consumer confidence index fell to 109.5 this month, the lowest reading since February, from 111.6 in October. The survey was conducted before the discovery of Omicron, a new COVID-19 variant.

Reuters