Consumer confidence continues to improve, but the latest gains are very modest, according to the Conference Board. Its consumer-confidence index (1969-70 equals 100) pushed ahead to 83.4 in November, up from 80.2 in October. The buying-plans index crawled to 94.2, up from 93.8 in October.
The survey, which covers 5,000 households throughout the country, is conducted monthly by National Family Opinion Inc. of Toledo, Ohio.
Although consumer confidence has now scored six monthly gains in a row, increases have been unimpressive during the last two months. The latest survey reports only a slight improvement in consumer expectations for the next six months.
The consumer mood had been subdued for months now, the director of consumer economics at the Conference Board says. "This is especially evident in consumer expectations and in buying plans. These developments parallel the recent reacceleration of inflation and the rise in interest rates. The higher cost of money has reduced consumers' capacity and inclination to buy durable goods and homes. More broadly, inflation and taxes have added up to a decline in the average household's real disposable income."
The recent election has had little effect on consumer confidence. But this is not surprising. None of the last four presidential elections have had a discernible effect on consumer sentiment. The determining factor in consumer confidence appears to be ongoing economic realities, rather than politics.