The Conference Board today said its Consumer Confidence Index fell to 90.5 in November, down from a revised reading of 92.9 in October, defying market expectations. Analysts had forecast the index would rise to 96.0.
The November figure marks the lowest point in the index since March, when it registered 88.5. The closely watched gauge of consumer sentiment has been in decline since peaking in July.
"With consumers' assessment of current conditions holding steadfast and intentions to spend for the holiday season up from a year ago, the outlook for retailers is mildly encouraging," said Lynn Franco, director of The Conference Board's Consumer Research Center. "But looking beyond the upcoming holidays, the continuing erosion in expectations suggests consumers do not feel the economy is likely to gain major momentum in early 2005."
Economists keep a close watch on measures of consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity.