Consumer confidence takes marked dip going into the holidays

With Thanksgiving just around the corner, Americans are bound to be traveling far and wide to visit their family members and give thanks for the good fortunes they have enjoyed over the past year. Throughout the last half decade or so, however, those good fortunes have been few and far between, as legislation from the administration of President Barack Obama has tightened government influence and control over the free market, hindering the economy from making the full-blown recovery Americans so desperately need. As a result, citizens across the country have been forced to scale back more and more on their annual holiday spending as consumer goods continue to become more expensive and individuals increasingly see their personal financial wealth evaporate.

Despite these trends, however, many analysts had expected that going into the busy holiday shopping season, consumer confidence would surely rebound, resulting in a much needed shot in the arm for the national economy right when the country needs it most. However, the latest data from the Conference Board (CB) shows that this factor is one less thing prognosticators will be giving thanks for as they sit down for their holiday dinner.

In a press release filed Tuesday, November 26, the CB indicated that confidence reached a seven-month low in November as Americans are increasingly wary about hiring in the United States as well as pay cuts for individuals currently employed. In October, the index had already slumped down markedly to 72.4 percent as weaker-than-expected job outlooks had many buyers girding their spending habits. The index read as high as 80.2 in September, and there was hope throughout the retail industry that leading into the holidays this number would bounce back as soon as November. Even the CB had anticipated in press statements that the November reading would increase by at least two points before Thanksgiving, but in a surprise move, it sank to 70.2.

"Sentiment regarding current conditions was mixed, with consumers saying the job market had strengthened, while economic conditions had slowed. However, these sentiments did not carry over into the short-term outlook. When looking ahead six months, consumers expressed greater concern about future job and earning prospects, but remain neutral about economic conditions. All in all, with such uncertainty prevailing, this could be a challenging holiday season for retailers," Lynn Franco, CB Director of Economic Indicators, said in a press release.

Consumer spending accounts for 70 percent of the overall economy, which makes this latest reading especially disheartening considering the holidays on the horizon. However, as the Associated Press notes, consumer spending doesn't always coincide with confidence, as recent years have seen spending go up when nervous consumers are least optimistic about the future either as an emotional releas or a preparation for worsening conditions. 

Despite adding 202,000 jobs between August and October, the economy was churning out more paychecks before the Great Recession and recovering at a much faster pace. This isn't the only statistic that seems to have consumers worrying, as all-important gas prices were up over the past two weeks after falling for nine straight weeks before that. This isn't good news ahead of the busiest traveling season of the year, since many individuals will be opting to spend more at the pump than in the malls and big-box stores over the coming months. 

For those who have acted wisely and made investments to protect their finances for both the short term and during retirement, they need to continue to look into asset protection to preserve their wealth during these increasingly uncertain economic periods.