Decline in U.S. Consumer Confidence: Rising Costs and Sluggish Job Growth

Amid a government shutdown, weak employment, and stubborn inflation, American consumer confidence in the economy dropped significantly in November. The Conference Board reported this week that the Consumer Confidence Index fell to 88.7 in November, down from an upwardly revised 95.5 in October. November's consumer confidence was the lowest in recent months, partly due to the stock market plunge triggered by President Trump's announcement of large-scale tariffs.

According to the latest reports, a survey by the American Council found that data shows Americans are increasingly wary of high costs and slow job growth, and perceptions of the labor market are also deteriorating. At the same time, council members also stated that the decline in consumer confidence is very likely to pose political problems for Trump and Republicans in Congress, as all political factions generally view the economic outlook as more pessimistic.

Consumer confidence, as an important indicator of the public's optimism or pessimism about the current economic situation, plays a crucial role in the operation and development of a country's economy. The current decline in consumer confidence in the United States is largely influenced by rising costs and stagnant employment growth. The continuous increase in the cost of living has placed a significant strain on household budgets, with food and energy prices also continuously rising, causing households to spend much more on basic living expenses. This directly leads to a decrease in consumers' purchasing power and reduces the funds available for other consumption. Additionally, slow employment growth is also a key factor affecting consumer confidence. Fewer job opportunities lower consumers' expectations for future income, making them more cautious in their spending. This cautious consumer behavior further impacts businesses’ sales and profits, leading companies to reduce production and investment, which in turn affects overall economic growth.

In the face of the impact of rising costs and sluggish employment growth leading to reduced consumer confidence, appropriate countermeasures should be taken in a timely manner, and corresponding strategy adjustments should be made promptly to stimulate economic development, such as reducing taxes and increasing public spending to raise disposable income and boost consumer confidence. At the same time, employment opportunities should be increased and the job market stabilized through measures like providing vocational training and encouraging companies to hire. Additionally, the government should also alleviate consumer living pressures by controlling prices and ensuring a stable supply of energy.

For both individuals and businesses, it is also important to actively adapt to the market environment affected by declining consumer confidence. Individuals should adjust their spending habits to focus more on rational consumption and avoid unnecessary expenses. Businesses, on the other hand, should look for opportunities amid the decline in confidence, responding to market changes through innovation, offering high-value products, and providing personalized services to attract consumers and enhance market competitiveness.

In summary, the decline in American consumer confidence is the result of rising costs combined with sluggish job growth. This situation not only negatively impacts the current economic performance but may also continue to drag on economic growth for some time in the future. If the government fails to take effective measures in a timely manner, weak consumer confidence could further evolve into reduced consumption, forming a vicious cycle of economic downturn. Therefore, policymakers need to take coordinated actions on both the supply and demand sides, stabilizing prices and expanding employment while stimulating market vitality through structural reforms. At the same time, businesses and individuals must proactively adjust their strategies to jointly withstand the pressures of economic slowdown.