U.S. consumer confidence declines to 7-month low
(c) 2013, Bloomberg News.
Confidence among U.S. consumers unexpectedly declined in November to a seven-month low as Americans grew more pessimistic about the labor-market outlook.
The Conference Board's index fell to 70.4 from a revised 72.4 a month earlier that was stronger than initially estimated, the New York-based private research group said Tuesday. The median forecast in a Bloomberg survey of 78 economists called for a November reading of 72.6.
The drop in sentiment helps explain why some retailers such as Best Buy Co. see a need to match competitors' discounts this holiday-shopping season. More employment opportunities and wage gains would help lay the groundwork for a pickup in household purchases that make up about 70 percent of the U.S. economy.
"The economy just has not performed very well this year and has been disappointing relative to what most people were hoping for and expecting through the course of the year," said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Conn. "It's one thing when you have one or two years into the recovery and things aren't progressing in the job market, but here we are four-plus years in."
Estimates of consumer sentiment ranged from 65 to 81 in the Bloomberg survey after a previously reported October reading of 71.2. The Conference Board's measure averaged 53.7 in the recession that ended in June 2009.
Other reports Tuesday showed applications for new-home construction increased in October and property values rose in September.
Building permits increased 6.2 percent to a 1.03 million annualized rate following September's 974,000 pace, according to the Commerce Department. Housing starts data for September and October were postponed until Dec. 18 due to the government shutdown.
The S&P/Case-Shiller index of property prices in 20 cities increased 13.3 percent from September 2012 after a 12.8 percent gain in the year ended in August, a report from the group showed in New York.
The Conference Board's barometer of consumer expectations for the next six months declined to 69.3, the lowest since March, from 72.2 a month earlier. A gauge of present conditions dropped to 72 from 72.6 in October.
The proportion of Americans who said jobs would become more plentiful in the next six months declined to 12.7 percent, the lowest since November 2011, from 16 percent.
The share of respondents who said they expected a pickup in their incomes declined to an eight-month low of 14.9 percent in November from 15.7 percent a month earlier.
"When looking ahead six months, consumers expressed greater concern about future job and earning prospects, but remain neutral about economic conditions," Lynn Franco, director of economic indicators at the Conference Board, said in a statement.
Consumer assessment of current labor-market conditions held up. More said jobs were plentiful and fewer said positions were harder to get.
Hiring picked up last month, with employers adding 204,000 workers, topping the most optimistic projection in a survey of 91 economists. Payrolls have averaged 186,300 so far in 2013, compared with 182,750 last year.
Job openings climbed in September to the highest level in more than five years, Labor Department figures showed last week.
Progress in the labor market will be a focus for Federal Reserve policymakers meeting Dec. 17-18 as they weigh when, and by how much, to reduce their unprecedented $85 billion in monthly bond-buying.
The central bankers "generally expected that the data would prove consistent with the committee's outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months," according to the record of the Federal Open Market Committee's Oct. 29-30 gathering.
_ With assistance from Chris Middleton in Washington.