Consumer Confidence Hits 2-Year High As Recession Fears Fade: Stock Market Optimism Soars To Record High [View all]

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Source: Yahoo! Finance

Benzinga
Consumer Confidence Hits 2-Year High As Recession Fears Fade: Stock Market Optimism Soars To Record High

Piero Cingari
Tue, November 26, 2024 at 11:11 AM EST * 4 min read

American consumers are feeling better about the economy than they have in years, as the latest data Tuesday from The Conference Board shows. ... The Consumer Confidence Index rose from 111.3 in October to 111.7 in November, reaching its highest level in nearly two years, aided by an improving labor market and easing concerns about a potential recession. ... "The proportion of consumers anticipating a recession over the next 12 months fell further in November and was the lowest since we first asked the question in July 2022," said Dana M. Peterson, chief economist at The Conference Board.

Labor Market Drives Optimism

The surge in consumer confidence was fueled by the Present Situation Index, which reflects business and labor market conditions. ... That metric jumped 4.8 points to 140.9, signaling widespread belief in the strength of the job market. Notably, 33.4% of respondents said jobs were "plentiful," while only 15.2% said jobs were "hard to get." Both figures improved compared to October. ... Consumers are also optimistic about the future availability of jobs. In November, 21.7% expected more jobs to be available in six months, up sharply from 18.4% in October. It's the most upbeat reading on job prospects in nearly three years. ... "November's increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market," Peterson said.

Confidence surged among younger Americans in November, with consumers under 35 driving much of the increase. Sentiment among those aged 35-54 dipped slightly after strong gains in October. ... Among income groups, households earning over $100,000 and those under $35,000 saw the most optimism, while the wealthiest consumers -- earning above $125,000 -- reported flat or slightly declining confidence.

Recession Risk At Record Lows

One of the most striking developments in the report is the collapse in recession fears. Recession expectations for the next 12 months have reached their lowest level since mid-2022, The Conference Board said. ... With the Expectations Index rising slightly to 92.3, well above the critical threshold of 80 that often signals economic downturn, consumers are showing little concern about a looming slowdown. ... "Consumers' optimism for their finances over the next six months reached a new high, even as their assessments of their family's current financial situation fell slightly," Peterson said.

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