Consumer confidence gains ground

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased by 4.8 points to 140.9. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions— ticked up 0.4 points to 92.3, well above the threshold of 80 that usually signals a recession ahead. The cutoff date for preliminary results was November 18, 2024.

“Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board. “November’s increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market. Compared to October, consumers were also substantially more optimistic about future job availability, which reached its highest level in almost three years. Meanwhile, consumers’ expectations about future business conditions were unchanged and they were slightly less positive about future income.”

Among age groups, November’s gains were led by a large jump in confidence for consumers under 35 years old. Meanwhile, confidence among consumers aged 35 to 54 declined slightly after surging last month. All income groups reported higher confidence except those at the very top (earning over $125K) and bottom (earning less than $15K). On a six-month moving average basis, householders aged under 35 and those earning over $100K remained the most confident.

Consumers became even more optimistic about the stock market: 56.4% of consumers expected stock prices to increase over the year ahead, another record high for this measure. Only 21.3% expected stock prices to decline. The share of consumers expecting higher interest rates over the next 12 months declined to 43.6%. The share expecting lower rates increased to 34.6%, the highest since April 2020.