Consumers believe the strong job market will keep getting stronger
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The U.S. labor market is in great shape.
And consumers think it is going to keep getting stronger.
On Tuesday, The Conference Board’s reading on consumer confidence in November showed that while overall confidence slipped slightly this month from the 18-year high hit in October, consumers’ assessment of the labor market continues to surge.
The “labor market differential,” an indicator that takes the percentage of consumers who say jobs are plentiful and subtracts the percent that says jobs are hard to find, hit a new cycle high in November of 34.4, the highest reading since January 2001.
“Despite a small decline in November, Consumer Confidence remains at historically strong levels,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Consumers’ assessment of current conditions increased slightly, with job growth the main driver of improvement… Overall, consumers are still quite confident that economic growth will continue at a solid pace into early 2019.”
The increase in the labor market differential was driven by a 1.2-percentage point increase in consumers who see jobs as plentiful and an equal percentage point drop in those who think jobs are hard to find.
The move higher to 46.6% of consumer seeing jobs as plentiful pushed this measure to its highest level in 17 years, and Bespoke Investment Group noted Tuesday there have been just 24 months in the last 621 with higher readings for this year.
“One thing to note with this series is that it tends to start to roll over shortly before the onset of recessions,” Bespoke notes. “As long as it keeps rising, though, it shouldn’t be a worry.”
And as we’ve discussed in recent days, the read many consumers have on the economy simply comes down to a thumbs-up or thumbs-down vote based on whether they have a job or not. More people not only getting jobs but believing that more jobs will be available bolsters consumer expectations and also shows why we’re seeing things like the quits rate hit new highs.
In October, the economy added 250,000 jobs. The unemployment rate is currently 3.7%. Over the last three months, an average of 218,000 new jobs have been created each month. And more folks think this is going to continue.
And so almost way you slice it, consumers are feeling good about the U.S. economy and are not seeing that faith shaken by financial markets right now.
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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland