As Black Friday nears, consumer sentiment drops further
WASHINGTON -- For retailers, this is not comforting news on the eve of Black Friday: Consumer sentiment continued to sag this month, failing to rebound from the plunge in October caused by the federal government shutdown and budget impasse in Washington.
The Conference Board, a New York research group, said Tuesday that its latest consumer confidence index dropped to 70.4. That is down from 72.4 in October and the lowest reading since April. The index was 80.2 in September.
Analysts were forecasting a slight uptick after the end of the government shutdown and stronger-than-expected reports recently on October job creation and third-quarter economic growth.
But consumers’ sentiment toward current economic conditions weakened further this month, and there was increased pessimism about the outlook, particularly for jobs. Consumers’ buying plans fell for cars, houses and appliances.
“When looking ahead six months, consumers expressed greater concern about future job and earning prospects,” said Lynn Franco, an economist at the Conference Board. “All in all, with such uncertainly prevailing, this could be a challenging holiday season for retailers.”
It should be noted that retail sales in October beat expectations, despite the drop-off in consumer sentiment. And in one encouraging sign, the latest weekly chain-store sales snapshot for last week showed a solid increase, although it was driven by gains at discount and dollar stores.
Still, it’s clear that consumers remain concerned about their future finances because of weak gains in jobs and incomes. And with gas prices rising recently ahead of Thanksgiving, analysts worry that consumers may be even more cautious in their spending.
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