After a rally in the stock market and an end to the government shutdown, consumers are starting to feel more confident. According to CNBC, consumer confidence index has risen to 131.4 from 121.7 in January.
There were many worries after the shutdown ended with a lot of volatility in the stock market, which reflected high interest rates. There was also a lot of tension with the issues surrounding trade talks with China. But the stock market has seemed to have rebounded towards the end of February and in turn has increased the overall consumer confidence. This is a very good sign with a lot of tension between the Fed and President Trump starting to arise within the media. It will be interesting to see if the consumer confidence continues to increase or if it will decrease with the pending decisions coming from the Fed.
Source: https://www.cnbc.com/2019/02/26/consumer-sentiment-hits-131point4-in-february-vs-124-expected.html
2 comments:
Jack,
Consumer confidence is a good measurement to gauge. The most interesting thing about it, however, is how subjective it is. Take January's CC of 121.7, for example. While there was talk of economic worries, is that not a high number? Perhaps relatively speaking to recent years, it may not be high. It is, on the other hand, 21.7 points above the "standard", if you will. Thus is it practical to say consumers were less confident in January? Maybe yes, maybe no. It is nice to see our CC increasing with the rebound of the stock market though.
Jack, great article. I think the important thing to remember here is the relativity of the Consumer Confidence index. Like Duncan said, 121.7 is a high number, but in relative terms it was the first drop in many consecutive months which was the frightening part. The government shutdown being over has helped, although the trade tariffs with China are going to be interesting as they seem to still elude us. As 2019 progresses, we hope to see a trade deal reached with China, we hope the government can come to agreements on future spending, and the economy as a whole can still grow. As it seems we are reaching some "peak" its possible that a slower growth rate can keep us on track.
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