Consumer confidence in America has fallen to a record low since July 2024. This casts a cloud on a season when Americans are always full of optimism. The latest reading of the Gallup Economic Confidence Index was down seven points to -30 in November. The Conference Board measure of Consumer Confidence was down from 95.5 to 88.7. This data stands out when one considers that this trend emerges when retailers rely most heavily on consumer purchases for end-of-year profits.
Consumer confidence suffers a setback during a critical holiday shopping season
The Gallup Economic Index lost seven points in November to register -30. This indicates a lower level of measure than -35 in July 2024. Only 21 percent of those polled rated current conditions in the U.S. economy as “excellent” or “good,” a sharp decline from 24 percent a month ago. A total of 40 percent of Americans consider current conditions to be “poor,” increasing from 37 percent in October.
The Consumer Confidence Index of The Conference Board suffered a decline from 95.5 in October to 88.7 in November, contrary to expectations that confidence would peak during the holiday season. The Present Situation Index also suffered a decline to 126.9, a fact that indicated a lack of confidence among Americans with regard to business and labor conditions. The Expectations Index suffered a sharp decline to 63.2, a fact that had never been observed since the beginning of the year. A reading below 80 indicates rising uncertainty.
Holiday spending predictions drop drastically due to economic conditions
The average amount willing to be spent for Christmas/holiday gifts among American consumers has fallen to $778 compared to $1,007 in October, down $229 based on a Gallup survey. This represents a drastic decline of 23 percent for only a month when Internet sales marked a record $11.8 billion for Black Friday.
The economic indicators paint a mixed picture regarding today’s environment
Fewer than three out of ten adults believe that conditions are getting better. This only constitutes 27%. This has decreased by four points. This has not been seen since July 2024. A percentage of two-thirds believe conditions are getting worse. This constitutes 68%. This information occurs while job data remains strong. The Bureau of Labor Statistics indicated jobs grew by 119,000 for the month of September. This beat expectations while unemployment levels remain stable at 4.4%.
The Consumer Price Index grew 0.3% seasonally in September. This comes right after a 0.4% acceleration in August. This could be a possible indicator of relief regarding inflationary pressures. However, a staggering 46% of American citizens believe that living expenses are worse than ever before. This has come to light in a recent poll conducted for Politico. This disconnect between data and perception tends to indicate a complex link between data and experiences when economies operate amidst turbulent circumstances.
Political leadership finds affordability a challenge because of a drop in confidence
Recent developments have indicated a distinct dissatisfaction with President Donald Trump’s administration of the economy during his second term, contrary to his pledge to make America more affordable. President Trump identified himself with “The Affordability President” in a social media update last November and pledged to “make America affordable again” during his 2024 campaign. Consumer confidence does not seem to have benefited much from such a pledge.
Important confidence indicators for November:
- Economic Confidence Index: -30 (compared with -23 previously)
- Current Situation Index: 126.9 (decreased from October
- Expectations Index: 63.2 (lowest level since early
- Holiday expenditures: $778( down $229 from October)
The fact that a dramatic decline in confidence levels among American consumers has fallen to 17-month lows during a prominent holiday shopping season may signal a level of economic concern that does not necessarily fit with holiday norms. While trends concerning economic data may be mixed, a reading of trends within consumer attitudes may signal a troubling disconnect for policymakers and those involved in retail who seek directions for 2026.
