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US-ECONOMY-CONSUMER-INDICATOR
US consumer confidence hits 18-month low in January
WASHINGTON, Jan 30, 2019 (BSS/AFP) – American consumers became more
worried about job and business prospects in January, rattled by stock market
volatility and the record-length government shutdown, according to a monthly
survey released Tuesday.
The Conference Board’s consumer confidence index, which can be used to
forecast consumer spending, sank for the third month in a row, hitting 120.2
— well below what economists had been expecting.
It was the lowest since July 2017.
While respondents’ views about the current business environment and job
markets were largely unchanged, the expectations index plunged by 10 points.
“Shock events such as government shutdowns… tend to have sharp but
temporary impacts on consumer confidence,” Lynn Franco, the board’s senior
director for economic indicators, said in a statement.
“Thus it appears that this month’s decline is more the result of a
temporary shock than a precursor to a significant slowdown in the coming
months.”
President Donald Trump last week temporarily agreed to end the five-week
partial government shutdown, which idled key government services and left
800,000 federal workers temporarily without pay.
The Congressional Budget Office estimated Monday the shutdown had stripped
$11 billion out of the economy, but all but $3 billion likely will be
regained in coming months.
The share of consumers saying jobs currently were “plentiful” rose but so
did the share of those saying they were “hard to get.” And respondents were
more pessimistic about jobs in the coming months.
The share of people expecting business conditions to worsen in the next
six months bounced 4.2 points to 14.8 percent while the share who say they
will improve shrank 2.1 points to 16 percent.
Ian Shepherdson of Pantheon Macroeconomics said consumer confidence had
been riding a high since President Donald Trump’s election but well above the
actual growth of consumer spending.
The drop in the index “means the gap has now closed,” he said in a client
note.
The decline does not necessarily signal that spending growth is set to
slow any more sharply than expected, he said.
“Still, it doesn’t look good.”
BSS/AFP/HR/1000