Market Week: November 1, 2021

Consumer Confidence Increases after Falling for Three Months in a Row

On Tuesday, October 26th, the Conference Board reported that its Consumer Confidence Index increased in October, after falling for the previous three months.

  • The Index now stands at 113.8 (1985=100), up from 109.8 in September.
  • The Present Situation Index – based on consumers’ assessment of current business and
    labor market conditions – rose to 147.4 from 144.3 last month.
  • The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – improved to 91.3 from 86.7

“Consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased. While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted.

The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October – a sign that consumer spending will continue to support economic growth through the final months of 2021. Likewise, nearly half of respondents (47.6%) said they intend to take a vacation within the next six months – the highest level since February 2020, a reflection of the ongoing resurgence in consumers’ willingness to travel and spend on in-person services.”

Present Situation

“Consumers’ appraisal of current business conditions was mixed in October.

  • 18.6% of consumers said business conditions are “good,” down from 19.1%
  • On the other hand, 24.9% of consumers said business conditions are “bad,” down from 25.3%.

Expectations Six Months Hence
Consumers’ optimism about the short-term business conditions outlook was mixed in October.

  • 24.3% of consumers expect business conditions will improve, up from 21.7%.
  • On the other hand, 21.1% expect business conditions to worsen, up from 17.6%.

Consumers were more optimistic about the short-term labor market outlook.

  • 25.4% of consumers expect more jobs to be available in the months ahead, up from 21.3%.
  • 18.3% anticipate fewer jobs, down from 19.9%.

Consumers were more positive about their shortterm financial prospects.

  • 18.7% of consumers expect their incomes to increase, up from 16.9%.
  • 11.3% expect their incomes will decrease, virtually unchanged from 11.4%.”

More Data Later in the Week
More economic data will be released later this week, including Durable Goods Orders on Wednesday; GDP and Pending Homes Sales Index on Thursday and Chicago PMI on Friday.

Click here to download a PDF of this report.