US consumers felt incrementally worse this month about their economic prospects.
That’s according to a mostly uneventful read on the Conference Board’s gauge, the first ostensibly tradable print of this week’s data deluge in the world’s largest economy.
At 100.2, the headline index was a slight beat. Consensus was looking for 100 on the nose. It nevertheless marked a four-month low (figure below). The range of estimates, from 59 highly-trained professionals, was 97.5 to 103.9.
The present situation gauge slipped, as did the expectations index.
Lynn Franco, Senior Director of Economic Indicators at The Conference Board, blamed, in part anyway, pump prices. “Consumer confidence declined again in November, most likely prompted by the recent rise in gas prices,” she said Tuesday.
That’d be compelling except that gas prices are lower, and oil has basically erased the entirety of this year’s gains (figure below).
Indeed, OPEC+ is currently debating another production cut amid stubbornly “depressed” oil prices. (The scare quotes denote that prices are hardly low in an absolute sense. Saudi self-interest is plainly a factor, as are frosty relations between the Kingdom and the Biden White House).
At this point, consumer nations (and particularly the US) are so exasperated with the cartel that a modest additional cut atop the recent two-million-barrel face slap from MBS, would probably elicit little more than a fatalistic sigh.
“Sunday’s OPEC+ ministerial meeting is shaping up as a potential repeat of the October surprise decision, with oil prices erasing all the 2022 gains based in large part on renewed China COVID-driven demand concerns and resilient Russian production,” RBC’s Helima Croft said. “This time around, the White House seems prepared for a potential OPEC+ reduction and while it will not be welcomed, it will probably not lead to a meltdown either,” she added.
With the midterms out of the way, and Democrats having held the Senate, the Oval Office is almost surely less interested in what Americans are paying at the pump than Biden officials were a month ago.
In any case, the Conference Board’s Franco went on to say Tuesday that inflation expectations are at “their highest level since July, with both gas and food prices as the main culprits.” Buying intentions for big-ticket purchases fell. Perceptions of the labor market improved at the margins.
All in all, the outlook is grim or, if that’s too strong, call it “subdued.” The Conference Board’s present situation index is indicative of lost momentum and expectations betray elevated recession odds.
“The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023,” Franco remarked.
I love the smell of stagflation in the morning.
Highly trained professionals………..LOL
Oil and gas prices stink of manipulation. Those high energy prices were basically the GOP’s case for ousting democrats in the midterms. Now that midterms are over the prices suddenly fall back to earth with no discernable change in energy production nor the war in Ukraine? Okay, good one big oil, those campaign ads you funded and also drove did some great work!
Russia is trying to sell as much oil as possible prior to a price cap, causing inventory builds. That’s why we see the current price action.
“I love the smell of stagflation in the morning.” Nice finishing touch!