The U.S. Conference Board’s Consumer Confidence Index, which has declined significantly over the past two months, fell again in November to its worst level in more than seven years, spooking traders.

The Index now stands at 82.2, down from 85.3 in October. The Present Situation Index fell from 107.2 to 93.5. The Expectations Index, however, increased from 70.7 to 74.6.

Consumers’ appraisal of current economic conditions is more pessimistic than last month. Consumers rating current business conditions as “bad” rose from 20.7% to 21.4%. Those rating conditions as “good” declined from 18.6% to 16.4%. Consumers claiming jobs are “hard to get” rose from 20.6% to 23.0%.

Consumers are slightly more optimistic about economic prospects six months from now. Those anticipating conditions to worsen declined from 20.3% to 17.3%. But, consumers expecting an improvement in business conditions decreased from 17.6% to 16.8%.

The employment outlook is also moderately more positive. Currently, 14% of consumers expect more jobs to become available, up from 13.9% last month. Those expecting fewer jobs to open up in the next six months decreased from 29.0% to 26.6%. About 20.3% of consumers expect their incomes to rise, up from 18.0% in October.

“Rising unemployment and continuing layoff announcements are dampening confidence,” says Lynn Franco, director of The Conference Board’s Consumer Research Center. “A turnaround in confidence levels is not likely before year’s end, nor are retailers likely to enjoy a blockbuster holiday season.”

“The implications for holiday spending are negative,” says BMO Nesbitt Burns. “The Board’s figures show households believe current conditions are worsening rapidly, but expectations are relatively stable.”

It also notes that with dropping new claims for jobless insurance, financial markets have been wondering whether labor markets are firming. “The Conference Board’s survey responds emphatically — no”

“This report was one of the first that has been on the weak side recently. It reminds us that the economy is not completely out of the woods yet, but it is only one straw in the wind.”
“The implications for holiday spending are negative,” says BMO Nesbitt Burns. “The Board’s figures show households believe current conditions are worsening rapidly, but expectations are relatively stable.”

It also notes that with dropping new claims for jobless insurance, financial markets have been wondering whether labor markets are firming. “The Conference Board’s survey responds emphatically – no”

“This report was one of the first that has been on the weak side recently. It reminds us that the economy is not completely out of the woods yet, but it is only one straw in the wind.”

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.