Dented by the delta variant, consumer confidence now confronts omicron
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Consumer confidence ticked down slightly in November, according to data The Conference Board released Tuesday.
The decline was driven mostly by concerns about rising prices — and, to a lesser degree, the delta variant of the coronavirus. The survey was taken before the public learned about the omicron variant.
So how might consumers react to this new contagion threat?
If virus cases spike and governments impose restrictions, The Conference Board’s Lynn Franco said, “that could dampen consumer confidence in the months ahead.”
Consumers might spend less, Franco said. Especially on in-person services, which are the most vulnerable to a surge of COVID infections.
“That’s going to impact, you know, the entertainment industry, travel, leisure and so forth,” she said.
The thing is, the emergence of the delta variant this summer didn’t negate consumers’ increasing enthusiasm for that kind of spending, per Tim Quinlan, senior economist at Wells Fargo.
“That kind of weighed on what was expected to be a big surge in services spending this summer. And while delta certainly dented that, it didn’t stop it,” Quinlan said.
Consumer confidence doesn’t always turn on a dime. Other factors could soften any downturn in sentiment, Quinlan said.
For instance, vaccination rates are higher now than they were when delta emerged. And the job market is strong.
“You’ve never had a greater share of consumers agree that jobs are as plentiful as they are today,” he said.
We’ll have to wait several weeks to learn about omicron’s effect on consumer confidence.
Liz Ann Sonders is chief investment strategist at Charles Schwab, a Marketplace underwriter. She’ll be watching other indicators in the meantime.
“There are real-time, mobility-based metrics. You know, box office receipts, OpenTable seated diners, New York City subway turnstiles” and travel data, she said.
Those indicators, Sonders said, will give us a sense of how consumers are reacting before the Consumer Confidence Index does.
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