The Conference Board’s Consumer Confidence Index (CCI) and the University of Michigan Consumer Sentiment Survey revealed a healthy increase in consumer confidence during the month of November. Both reports indicate consumers view current conditions more favorably and were more optimistic about the future, although the gains observed in the University of Michigan index were smaller. Unfortunately, even with these improvements, consumer confidence is still lower than it was at the beginning of the year and remains in line with levels that were observed near the end of the recession.
Notwithstanding this month’s increase in confidence, the labor market’s lackluster recovery continues to have a heavy influence on consumers’ perceptions of the overall economy. Private payroll employment increased on net by 104,000 during October and has averaged 122,000 over the last three months. While this is an improvement from the weak pace of job growth observed during the summer months, payrolls are not expanding at a rate fast enough to yield appreciable reductions in unemployment—which remains stuck at 9%. The CCI indicates that only 5.8% of respondents believed that jobs were plentiful and 12.9% expected more jobs would be available six months from now. Each of these metrics improved relative to their reading in September and October, but consumers are still much more likely to report jobs as “hard to get” now and expect fewer jobs to be available within the next six months.