This article continuously references the volatile stock market and how that has effected overall consumer confidence. The index fell from 131.4 to 124.1 in February.
The main point in this article is that the volatility of the stock market has basically been matched by the consumer confidence index over recent months. With the huge stock market drop in December of 2018 we saw one of the first drops in consumer confidence in Trumps administration. In the times we are in now, aka good economic conditions, full employment, and growing markets, any hiccup in the system can raise large concerns. Another reason, is because the US economy has been prospering for many years now, so again that hiccup can really make people think if a slowdown is among us.
Going forward, any future stock market correction should lead to even more doubt. Although, when times are good no one wants to be the one to think the market is going to fall soon. As basically all of our recessions have shown.
From my feeble point of view, we do not have a systemic issue like CDO/MBS of 2008 which would only magnify a recession. If the market truly is over valued and we need to slow down a bit for future growth, then so be it, lets just hope the FED and administration prepare for it.
https://www.cnbc.com/2019/03/26/us-consumer-confidence-weakens-in-march.html
3 comments:
I agree on your point that it's not as significantly catastrophic as the recession in 2008. The economic cycle currently is shifting towards slowing down and there are probably some bubbles that could pop any second. However it seems like a problem that can be resolved with the appropriate policies and actions. We also have to take Christmas and New years for the consumer confidence into account. Consumption most probably rose higher than the previous quarters, and the massive gifting season's over for now. Hence I think there is no reason to panic, but we could have an adjustment period to possibly prevent any economic crisis from happening.
Interesting article, Antonio. I also agree that this is not a sign of a recession that could occur like in 2008. In addition, a couple of weeks ago, I posted an article that had the consumer confidence bouncing back in February. It is interesting that the consumer confidence is fluctuating on a month to month basis and it seems like we are taking two steps forward and one step back. Hopefully in the next few months there will be changes in the economy that will increase the consumer confidence.
very interesting article. I agree with you that im not sure there will be a recession like we had in 08'. Also you stated that the economy has been fantastic for numerous years and that any hiccup causes people to think the recession is here. Hopefully the FED is taking steps to ensure the down side of the business cycle will not be as drastic in 08.
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