US consumer confidence unexpectedly drops in November

Analysts were caught off guard on Tuesday after a survey showed that consumer confidence in the US unexpectedly tumbled in November.

The Conference Board's monthly consumer-confidence index sank to 88.7 this month after jumping to a seven-year high of 94.1 in October.

The consensus forecast was for an increase to 96.0.

The present situation sub-index fell from 94.4 to 91.3, while the expectations index dropped from 93.8 to 87.0.

Lynn Franco, the director of economic indicators at The Conference Board, said confidence deteriorated "due to reduced optimism in the short-term outlook".

"Consumers were somewhat less positive about current business conditions and the present state of the job market; moreover, their optimism in the short-term outlook in both areas has waned," she said.

"However, income expectations were virtually unchanged and gas prices remain low, which should help boost holiday sales.”