Macro Monkey Says
Confidence isn’t Key; It’s THE Key
The highest inflation rates in decades, an S&P 500 still flirting with bear territory, and a historic bank failure with lingering contagion…how’s everybody doing today?
Apparently, very well, at least according to consumer confidence reports, that is.
The Conference Board, a non-profit research organization out of NYC, on Tuesday, reported findings from its latest consumer confidence surveys, essentially conducting a vibe check on consumers for the month of March.
Given all that tomfoolery listed above, you, me, and every economist on Earth would probably expect the average American to be down horrendous right now. Spoiler alert: they are not; far from it.
Expectations were for a modest reading of around 101. Keep in mind, anything above 100 means consumers are more confident than they were when the 1985 benchmark of 100 was set. Luckily, confidence isn’t subject to inflation (as far as we know), but March’s consumer confidence reading still came in at a towering 104.2.
To say the very least, that was way above expectations. Now, consumers are generally an optimistic bunch, expecting tomorrow to be a little bit better than today, as it has been for decades across the world, particularly in the West.
But amidst the 2nd and 3rd largest bank failures in history?! Consumers feeling themselves this much is just a little strange, and frankly, that’s the confidence I wish I had when talking to someone at a bar.
Anyway, to be fair, this is just a tiny uptick in sentiment from the February reading of 103.4 in February. But like we always say, it’s not about the level; it’s about the direction.
If you had told me two weeks ago that consumer confidence would be up this month, the conversation would’ve ended right there. Despite coming in contrast with the University of Michigan’s reading earlier in the month, which showed sentiment contracting, this reading shows that tighter conditions across the lending and the broader financial sector hasn’t been nearly enough to kill the spending vibe among consumers.
That’s something we need to hear right now. At the end of the day, the performance of the US economy over any given period centers around one thing: the health of consumer spending. Historically, confidence and spending have a surprisingly weak correlation, but in this economy, we’ll take all the wins we can get.
Moreover, a lack of confidence is exactly the kind of thing that sparks, I don’t know, the 2nd and/or 3rd largest bank runs in a nation’s history with the potential to trigger more. So, seeing this slight tick-up should help keep the nightmares away for now.
|
Porro repellendus quia beatae sed voluptatem. Recusandae velit quam neque architecto et vero. Dolores sit id velit autem tenetur maxime et.
Repellat et quis adipisci ullam neque aut omnis. Placeat dolores est mollitia id. Harum aperiam eaque et voluptas est alias. Quia maiores porro natus unde est ad.
Quasi numquam natus dolore dicta sint. Voluptatem eos ea saepe rem rem pariatur maiores et. Quo dolor dicta atque saepe officia consequatur error voluptatem.
Qui nemo totam distinctio odio a. Quia eum et voluptas amet delectus ut ad recusandae. Non error rem molestias dolorum sed aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...