The current conditions index went down to 113.6 from 116.5. The gauge of consumer expectations fell to 87.6 from 90.5.
Also, Americans expect the inflation rate to be 2.6 percent next year, higher than 2.4 percent in October. The 5-year expectation was unchanged at 2.5 percent.
Consumers (and policy makers) have four key concerns: prospective trends in jobs, wages, inflation, and interest rates. An improving labor market was spontaneously mentioned by a record number of consumers in early November, and anticipated wage gains recorded their highest two-month level in a decade. These favorable trends were countered by a slight rise in year-ahead inflation expectations and a growing consensus that interest rates will increase during the year ahead. Needless to say, the preliminary November data is hardly sufficient to indicate that the persistent strength in the labor market has finally prompted higher inflation. Moreover, consumers anticipated that the size of the changes would be rather small, leaving economic conditions largely unchanged at favorable levels. While the expected Fed rate hikes seem to be the right preemptive action, the critical issue is whether income gains will be sufficient to outweigh rate hikes in home and vehicle purchase decisions. Overall, the data are consistent with a 2.7% rise in personal consumption spending in 2018.