Consumer confidence edged down in November on a weak jobs outlook and worries about the strength of the U.S. economic recovery, according to a survey released Tuesday.
The IBD/TIPP Economic Optimism Index fell 0.8 point from October to 47.9, the second straight decline and second straight sub-50 reading. Readings below 50 indicate pessimism.
The economy grew at a 3.5% annual rate in Q3, prompting many economists to declare an end to the deepest recession in decades.
But employers shed 190,000 jobs in October and unemployment jumped to a 26-year high of 10.2%. Most economists expect the jobless rate to keep moving higher until some point in early 2010.
"I feel very secure about the fact that we're coming out of recession, but job creation has been very sluggish as evidenced by the growth in unemployment," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner.
All three of the index's main components declined.
The economic outlook, a gauge of how consumers feel about the economy's prospects in the next six months, fell half a point to 49.2.
The personal financial outlook, which measures how Americans feel about their own finances in the next six months, fell 1.7 points to 52.5. That subindex's large decline may reflect how job losses and anxieties are affecting Americans' view of their own economic situation.
The index of confidence in federal economic policies slipped 0.1 point to 42.
Confidence was weakest among investors and those making more than $50,000 on fears of a double-dip recession, Mayur said.
Government programs such as Cash for Clunkers, an $8,000 first-time homebuyer tax credit and Federal Reserve efforts to keep mortgage rates low boosted Q3 growth. But many economists have expressed concern that the economy won't be able to stand on its own when those programs run their course and the Fed starts to raise interest rates.
"Though we've come a long way, it is certain that it's going to be a jobless recovery and it's very difficult to say how strong the growth is going to be," Mayur said.
Meanwhile, an index of small-business optimism edged up 0.3 point in October to a still-low 89.1, the National Federation of Independent Business said Tuesday.
"The October gain was minor, so the good news is still less bad news," Bill Dunkelberg, NFIB's chief economist, said in a prepared statement.
Small businesses, the main drivers of job growth, continue to shed employees but at a slower pace, the survey showed. Inventories are also shrinking at a slower pace as firms bring stocks in line with slower sales. But a net 11% expect the economy to improve in the next six months, up three percentage points from September but still low.