US Consumer Does Not Have Much Confidence
- CB Consumer Confidence less than anticipated
- Consumer 70% of US economy
The US released the CB Consumer Confidence numbers for the month on Tuesday. This is a measure of overall confidence of the United States consumer. With the US consumer being 70% of the world’s largest economy, this is of course something that people will pay close attention to as it greatly influences everything else in a trickledown effect.
The announcement
The announcement was a reading of 126.5, anticipated at 126 even. While not a huge shortcoming, it does suggest that perhaps there are a few cracks in the ice when it comes to confidence. Granted, the stock market has performed quite well in the United States and that does have a bit of an effect. The reality is that very few Americans own stocks directly anymore. At best, they own them through some type of pension fund.
The previous month was revised upward from 125 to a reading of 126.8, so there was a bit of gain. There’s not a lot to look at other than the fact that this is yet another miss when it comes to US economic figures. The market is very likely to see a lot of questions raised towards the Federal Reserve. Specifically whether or not it is a bit closer to getting into the quantitative easing game again. There have been a multitude of economic releases lately that have been less than anticipated. This will continue to be at the forefront of most trader’s minds.
The main take away
Heading into 2020 a lot of eyes will be on the Federal Reserve and the US economy. The markets have been very bullish, but there will be some concerns on whether or not continuations in growth can be found. This is a sign that perhaps some adjustments need to be made. The first one, of course, would be the US dollar. There is the possibility that more quantitative easing is coming down the road, and that should continue to cause the greenback to slip.
Stock markets are probably a little overinflated at the moment. A less than anticipated sign of strength coming out of the consumer sector won’t be anything that will send buyers into the market hand over fist. None of this is terminal, it’s just more to pay attention to as things continue over the next couple of months. There are signs that softening is starting to occur in the United States. It’s very possible that the consumer confidence figures next month may be paid attention to a bit more than usual.