American consumers remain very upbeat about the US economy and prospects for employment into 2019, despite dipping from a record level in October, according to a survey released Tuesday.
However, the Conference Board said the November survey showed consumers were less optimistic about the outlook for business conditions and income in the near-term, even while they expect jobs to be plentiful.
The consumer confidence index dipped more than two points to 135.7 from the 18-year high of 137.9 last month, the survey showed, which was better than economists had expected. The feelings about present conditions improved again, driven by the strong employment and plentiful jobs, but the view of the economy six months in the future fell four points.
"Overall, consumers are still quite confident that economic growth will continue at a solid pace into early 2019," said Lynn Franco, the Conference Board's director of economic indicators.
"However, if expectations soften further in the coming months, the pace of growth is likely to begin moderating."
Analysts note that the expectations gauge reflects the recent drop in the stock market, which in the past two months has erased most if not all of the 2018 gains. Markets have been concerned about the impact of President Donald Trump's trade wars as well as the prospects for rising interest rates.
The split between the outlook for present and future conditions "is not surprising," economist Ian Shepherdson of Pantheon Macroeconomics said, adding that "the expectations index is sensitive to the stock market, so it reflects the recent correction and volatility." "The present situation index is driven mostly by the unemployment rate, which is at a 49-year low and still falling," he said in a research note.
Economist Joel Naroff noted that confidence is consistent with moderating growth and a slowing housing market after the boom early in the year. "Households remain confident, but their irrational exuberance is wearing off," Naroff said.