The numbers: A survey of consumer confidence fell to 100.2 in November and touched the lowest level in four months, reflecting growing angst about a softening economy and potential recession.
The closely followed index dropped 2 points from 102.2 in the prior month, the nonprofit Conference Board said Tuesday. Economists polled by The Wall Street Journal had forecast the index to fall to 100.
Consumer confidence tends to signal whether the economy is getting better or worse. The index began to fall in the spring because of high inflation and now a slowing economy is adding to the worries.
Key details: A measure of how consumers feel about the economy right now slipped to 137.4 in November from 138.7 in the prior month. That’s the lowest level in a year and a half.
An increase in gas prices in early November contributed to the decline in confidence. The cost of fueling up had fallen sharply toward the end of the summer before rising again in the fall.
A similar confidence gauge that looks ahead six months fell to 75.4 to from 77.9 to mark a six-month low.
Big picture: The economy is cooling off because of a rapid increase in interest rates orchestrated by the Federal Reserve to tame inflation. Higher borrowing costs make it more expensive for consumers and businesses to spend and invest.
If rates go high enough, a recession could also ensue. Many economists predict the U.S. in 2023 will suffer a second downturn in four years.
Looking ahead: “The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023,” said Lynn Franco, senior director of economic indicators at the board.
Market reaction: The Dow Jones Industrial Average
DJIA,
-0.43%
and S&P 500
SPX,
-0.51%
were little changed in Tuesday trades.
