US Consumer Confidence Falls
Consumer confidence has been hurting as a result of economic pressures around the world. It has dipped for the fourth straight month contrary to expectations. The Conference Board expected the index to rise to 126.6 yet it fell to 125.5. Recent data is pointing at slower growth and a weaker economy as the years end approaches. Lynn Franco, senior director of economic indicators of The Conference Board still suggests, Overall, confidence levels are still high and should support solid spending during this holiday season.” Expectations for spending in the holiday season are strong and projected to help sales grow 4% in this coming period. Hopefully the upcoming holiday season will help curtail this fall in consumer confidence as we approach the new decade.
Ironically, we both read the same article. Posing a new question that I didn't mention in my post: how much of a boost does holiday spending give the economy? It seems to me that CPI may drop, but people will still spend plenty of money toward holiday spending. This has to be a large boost in the consumption and investment part of GDP. Plenty of people buy cars and invest in other things around the holidays, so how much do the holidays impact GDP?
ReplyDeletehe National Retail Federation estimates sales should grow by about 4% in the holiday shopping season. JP Morgan analysts expect sales to increase by 5% during this years holiday season. With sales making up a portion of consumer spending, which accounts for 68% of the U.S. economy, increases do have a significant impact on boosting the economy.
DeleteSince consumption has been the strongest factor in the GDP equation recently, I hope that this most recent data showing a fall in consumer confidence doesn't lead to a larger issue and a possible decline in growth in the upcoming initial quarter of 2020.
ReplyDeleteWe've seen business investment beginning to falter as well so while consumption is usually more stable it will be interesting to see what effects the lower CC has on GDP combined with the decreased investment. I agree that it could be worrisome moving into 2020.
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