The Conference Board consumer confidence index fell to 109.5 in November after rising to 111.6 in October. The current situation index, based on consumers' assessments of current business and labor market conditions, decreased from 145.5 to 142.5; The index of expectations of consumers, based on the short-term outlook for income, jobs and labor market conditions, fell from 89 to 87.6.
If we look at the other sub-items; The development of the employment market continues to be expected by the consumer. On the other hand, it is thought that conditions in the job market are not better, possibly due to Covid. Delta caused uncertainty about a certain period, now concerns about the new variant will come to the fore. The rise in expectations showing details about inflation continues. In this context, an increase in 12-month inflation expectations from 7.1% to 7.6% is observed. This, of course, shows how inflation is reflected in the eyes of consumers. On the other hand; Due to concerns about rising prices and Covid uncertainty, the proportion of consumers planning to buy houses, cars and white goods in the next six months seems to have decreased.
The expectation of an increase in inflation brought consumption forward, but production that slowed down due to price pressure exceeding the demand-eroding threshold and supply shortages will also drag down private consumption. As a matter of fact, the chip crisis in terms of automobiles and the prices in terms of housing have come to the fore as the determining variables. If income growth does not follow inflation, demand and thus the economy will slow down. If it does, inflation will rise with firm costs and accelerating demand. Plus, since it is believed that inflation will increase further, the additional effects of this situation on pricing behavior in the market should be evaluated in terms of managing expectations. The expectation that the Fed will accelerate the tapering phenomenon stems from this. Now we have to deduce inflation from the details of employment data. The variant, on the other hand, has emerged as an important risk that will create a headwind in terms of economic recovery against the resurgence potential of Covid-19. In 2022, the Fed will also closely monitor the situation on the basis of protection of economic growth.
Kaynak Tera Yatırım
Hibya Haber Ajansı