Consumer confidence dipped slightly in November, according to The data The Conference Board released Tuesday.
The drop was mainly due to concerns about rising prices – and, to a lesser extent, the delta variant of the coronavirus. The investigation was carried out before the public learned of the existence of the omicron variant.
So how might consumers react to this new threat of contagion?
If virus cases increase and governments impose restrictions, the Conference Board Lynn franco said, “this could weaken consumer confidence in the coming months.”
Consumers could spend less, Franco said. Especially on in-person services, which are most vulnerable to a wave of COVID infections.
âIt’s going to have an impact, you know, on the entertainment industry, travel, leisure and so on,â she said.
The point is, the emergence of the Delta variant this summer hasn’t offset growing consumer enthusiasm for this kind of spending, according to Tim Quinlan, senior economist at Wells Fargo.
âThis stuff has weighed on what is expected to be a big increase in spending on services this summer. And while delta certainly damaged that, that didn’t stop it, âQuinlan said.
Consumer confidence is not always there. Other factors could mitigate any slowing in sentiment, Quinlan said.
For example, vaccination rates are higher today than they were when the Delta emerged. And the job market is strong.
âYou have never had a greater proportion of consumers agreeing that there are as many jobs as they are today,â he said.
It will take several weeks to know the effect of omicron on consumer confidence.
Liz Ann Sonders is Chief Investment Strategist at Charles Schwab, a Marketplace underwriter. She will be monitoring other indicators in the meantime.
âThere are real-time measurements based on mobility. You know, till receipts, OpenTable seated diners, New York subway turnstiles, and travel data, she said.
These indicators, Sonders said, will give us some idea of ââhow consumers react before the Consumer Confidence Index.