US consumer confidence plunges on souring jobs outlook

US consumers turned markedly less confident in the economy in November -- both in its current and future conditions -- as they viewed prospects in the job market dimming, a report showed Tuesday.

The Conference Board said its Consumer Confidence Index dropped to 90.4 in November, its weakest level of the year, after falling to a revised 99.1 in October from 97.6.

"The decline was mainly due to a less favorable view of the job market," said Lynn Franco, head of economic indicators at the Conference Board.

"Consumers' appraisal of current business conditions, on the other hand, was mixed. Fewer consumers said conditions had improved, while the proportion saying conditions had deteriorated also declined. Heading into 2016, consumers are cautious about the labor market and expect little change in business conditions."

A sub-index measuring consumers' views of current conditions slid to 108.1 in November from 114.6 last month. Looking ahead six months, the expectations index dropped to 78.6 from 88.7 in October.

The number of consumers reporting jobs currently were "plentiful" in the first half of November dropped sharply, as those did anticipating more jobs in the months ahead.

At the same time, the proportion expecting their incomes to increase fell, while those expecting a decrease rose.

Analysts were perplexed by the unexpected loss of confidence. Analysts on average had forecast a rise to 99.6 on the index.

"Keep in mind the third-quarter earnings reports were a disappointment and a significant number of layoffs were announced. This may have influenced the read from this report," said Steven Ricchiuto, chief economist at Mizuho Securities USA.

Ian Shepherdson of Pantheon Macroeconomics noted that the stock market drop in November came as the survey closed on November 13, so that was not likely a factor in denting confidence.

"Most of the decline in sentiment came in the job numbers, which is hard to explain given the October rebound in payrolls and the very low pace of layoffs," Shepherdson said.

New claims for unemployment insurance benefits, a sign of the pace of layoffs, have been trending at a four-decade low and October job growth of 271,000 was the strongest of the year.

"The trend in confidence measures is drifting lower as the surge triggered by the plunge in gas (gasoline) prices fades, but spending growth is robust, and that's ultimately what matters," he said.