US consumer confidence fell to a reading of 96.1 in November as rising coronavirus cases pushed American optimism down to the lowest level since August. The November reading released Tuesday by the Conference Board represents a drop from a revised 101.4 in October, the AP reports. Economists were expecting a reading of 98, notes the Wall Street Journal. The decline reflected a big drop in consumer expectations for income, business, and labor market conditions. "Heading into 2021, consumers do not foresee the economy nor the labor market gaining strength," said Lynn Franco, senior director of Economic Indicators for the Conference Board. Consumer confidence is closely watched for signals it can provide of how willing households are to spend. Consumer spending accounts for 70% of economic activity in the US.
"We think the sharp rise in positive coronavirus cases nationwide, which has prompted new restrictions and shutdowns in many states, has led consumers to be more fearful," said Chris Rupkey of global financial group MUFG. The consumer confidence index is set on a scale using 1985 as the benchmark score of 100. In the leadup to the pandemic with the country enjoying unemployment at a half-century low of 3.9%, the confidence index had risen above 130. It stood at 132.6 in February but plunged to 85.7 in April as millions of Americans lost their jobs after the country went into lockdown to try to halt the spread of the pandemic. The index has bounced around since its big April decline but remains well below the levels seen before the pandemic hit.
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