Consumer confidence declines to seven month low ahead of holidays

Nov. 26 (UPI) -- Consumers are concerned mostly about hiring, and confidence has declined to a seventh-month low, below what economists expected. This could shape holiday spending, despite major retailers driving down prices.

Current job conditions ticked upward, but "consumers expressed greater concern about future job and earning prospects, but remain neutral about economic conditions,” said Lynn Franco, director of economic indicators at the Conference Board, in a statement.

The Conference Board's indicator dropped to 70.4 from 72.4 a month ago, much weaker than the 72.6 expected this month.

This follows a period of stagnant wages and fluctuating jobs reports. The latest claims for unemployment insurance had been lower than economists expected, falling the most in two months. But hiring stayed mild and only slightly stronger than expected. This could be to meet demands for the holidays.

Consumer sentiments toward overall economic conditions remained unchanged. The Federal Reserve this month announced that they are likely to continue government stimulus to the economy until the unemployment rate falls toward a 6.5 percent threshold. It is currently at 7.3 percent.

Declining confidence worries retailers, as many are already positioned to see a tough holiday season. Prices at lower-cost retailers such as Walmart, Best Buy, Target and Kohl's are dropping to be more competitive.

But higher-end stores such as Tiffany and Bloomingdales are seeing rising earnings and have better outlooks for the holidays as the wealthy are more willing to spend.

[Bloomberg] [Business Insider]