US consumer confidence fell to its lowest level in 10 years in November due to inflation, which erodes their purchasing power, according to a preliminary estimate from the University of Michigan released Friday.
The index was located at 66.8 points, according to preliminary data, compared to 71.7 points in October and 72.8 in September.
If confirmed, the data would represent a drop of 6.8% compared to the previous month and 13.1% if compared to November 2020.
“Consumer confidence fell in early November to its lowest level in a decade due to a rising rate of inflation and a growing belief among consumers that effective policies have not yet been developed to reduce the damage of inflation. Richard Curtin, the institution’s chief consumer survey economist, said in a statement.
Consumers reported distrust in making purchases in the face of rising prices for homes, vehicles and the purchase of durable goods.
The institution will release the final data on November 24.
Resignations, also in record
Added to the mistrust of consumers is the fact that more and more people are leaving their jobs.
The number of Americans who voluntarily quit their jobs reached a record high in September, according to the latest monthly job and job rotation survey from the Labor Department (JOLTS) released on Friday.
Resignations or voluntary departures reached a record 4.4 million, with an increase of 164,000 in September and 242,000 in August.
The number of resignations is considered a good measure of confidence in the job market, as workers leave their jobs when they are most confident of their ability to find a new job.
These data could be a sign that companies will have to keep raising wages to attract workers.
“The constant increase in resignations points to a wage growth between 4.5 and 5%, well above the rates that would be consistent with an inflation that falls in a sustainable way towards the objective of 2% of the Federal Reserve (Fed)”, said Michael Pearce, a senior US economist at Capital Economics in New York, referring to the JOLTS report.
So far, the Federal Reserve has resisted calls for stronger measures to combat inflation, such as raising interest rates, arguing that it remains transitory even if the situation persists well into next year.
Currently, interest rates in the United States are in a range of 0.0 to 0.25 percent.
Job offers are reduced
Regarding job offers, an indicator that reflects labor demand, the number dropped by 191,000 positions, to 10.4 million on the last day of September. The hiring pace was unchanged at 6.5 million in September.
The government reported last week that the economy had created 531,000 non-farm jobs in October, up from 312,000 in September.
Reference-www.eleconomista.com.mx