Consumer confidence unexpectedly declines in November

AP Business WriterNEW YORK (AP) -- Consumer confidence unexpectedly eroded for the fifth consecutive month in November, hitting a 7 1/2-year low as Americans continued to worry about layoffs and their buying power.

The New York-based Conference Board said Tuesday that its Consumer Confidence Index fell to 82.2 from a revised 85.3 in October.

Analysts were expecting an increase to 86.5.

"Rising unemployment and continuing layoff announcements are dampening confidence," said 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," she said.

The index, based on a monthly survey of some 5,000 U.S. households, is closely watched because consumer confidence drives spending, which accounts for about two-thirds of the nation's economic activity.

The index compares results to its base year, 1985, when it stood at 100. The November figure is the lowest since February 1994, when it reached 79.9.

Employers have slashed hundreds of thousands of jobs since hijackers plowed commercial jets into the World Trade Center and the Pentagon on Sept. 11, and companies had started eliminating jobs well before the attacks in response to the slowing U.S. economy.

In recent weeks, stock prices had started to make a comeback following U.S. military victories in Afghanistan and an optimism that the U.S. recession -- officially confirmed Monday by the National Bureau of Economic Research -- would be short-lived.

But the Conference Board said consumers' assessment of the current economic climate is more pessimistic than last month. Consumers rating current business conditions as bad rose to 21.4 percent in November from 20.7 percent in October, while those who thought conditions were good declined to 16.4 percent from 18.6 percent.

However, the board said consumers were slightly more optimistic about economic prospects for the next six months.

The Conference Board is a nonprofit research and business group, with more than 2,700 corporate and other members around the world.

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