The consumer confidence index dropped again in November, sliding to 87.3 from a downwardly revised 95.2 last month, the Conference Board reported yesterday. The October index reading was originally reported as 95.6.Economists polled by IFR Markets predicted the index would slip to 90.5.The present situation index slid to 115.4 from a downwardly revised 118.0, originally reported as 118.8, while the expectations index decreased to 68.7 from a downwardly revised 80.0 last month, originally reported as 80.1.“This month’s deterioration in confidence was due primarily to the sharp decline in the expectations index,” said Lynn Franco, director of the Conference Board’s consumer research center. “Consumers’ apprehension about the short-term outlook is being fueled by volatility in financial markets, rising prices at the pump, and the likelihood of larger home heating bills this winter. In fact, consumers’ inflation expectations have surpassed the spike experienced this spring and a larger percentage than last month expect stock prices to decline. The present situation index, despite losing ground, still suggests the economy is expanding, albeit slowly. Despite this rather bleak outlook, consumers have not lost their holiday spirit and anticipate spending more on gifts this season than they did last Christmas.”
