Consumer confidence falls in November

Consumer confidence unexpectedly fell in November as concerns about the job market and business conditions offset falling gasoline prices and roaring stocks.

A closely watched index of consumers' perceptions of the economy and labor market declined to 88.7 from 94.1 in October, the Conference Board said Tuesday. Economists expected a reading of 96.

Consumer confidence had been trending up for much of this year, reaching a seven-year high last month.

Despite the drop, the latest reading is still relatively solid, with the confidence measure averaging 69.8 in 2012 and 2013.

Also, "income expectations were virtually unchanged and gas prices remain low, which should help boost holiday sales," says Lynn Franco, the Conference Board's director of economic indicators

Oil prices that have tumbled amid weak global growth have pushed down gasoline prices since the summer, leaving consumers more optimistic and with extra spending money. And average monthly job growth has well exceeded 200,000 this year, though job gains slowed a bit recently. Meanwhile, the stock market has staged a robust rally since global economic jitters drove down share prices in mid-October.

The improved outlook has fueled stronger consumption recently and has boded well for the upcoming holiday sales season.

Paul Dales,senior US economist at Capital Economics, says this month's drop in confidence is "hard to square" with Americans' improved finances, falling jobless claims and other recent measures of consumers' perceptions. He said he suspects the disappointing reading to be reversed in coming months.

In November, consumers' views of the current economy fell moderately while a measure of their expectations declined more sharply. The share of Americans saying jobs are "plentiful" fell to 16% from 16.5%, while those saying jobs are "hard to get" ticked up to 29.2% from 29%.

Meanwhile, the portion expecting business conditions to improve over the next six months decreased to 17.6% from 19.4%. Those expecting conditions to worsen rose to 10.7% from 8.9%. The share anticipating more jobs also slipped, to 15% from 16%.