"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," said Lynn Franco, director of The Conference Board Consumer Research Center.
The present situation index, which measures how shoppers feel now about the economy, fell to 115.4 from 118.0 in October. The expectations index, which measures shoppers' outlook over the next six months, fell to 68.7 from 80.0.
"It doesn't mean that shoppers are not going to spend. It implies they are going to be cautious," this holiday season, said Joel L. Naroff, president and chief economist at Naroff Economic Advisors Inc.
Wall Street paid little attention to the confidence report, rebounding 215 points yesterday after the Abu Dhabi Investment Authority said it will invest $7.5 billion in Citigroup Inc. - a vote of confidence for the nation's largest bank, which has struggled with heavy losses amid the ongoing mortgage crisis.
For retailers, the downbeat report on consumer confidence further fueled concern that the holiday shopping season will be weak. Retailers struggled with disappointing sales this past fall, and while many retailers were encouraged by better-than-expected turnout for the official start of the holiday shopping season, it was the fat discounts that lured consumers in.
The consumer confidence report - derived from 5,000 responses through Nov. 19 - showed that shoppers' outlook for the labor market was more pessimistic, however. The percent of consumers expecting more jobs in the months ahead fell to 10.8 percent from 13.3 percent, while those anticipating fewer jobs rose to 23.1 percent from 20.2 percent. The proportion of consumers expecting their incomes to decrease in the months ahead rose to 11.0 percent from 9.1 percent.
