Market Outlook: Conference Board’s Consumer Confidence Index
Anxiety is rife as Conference Board’s Consumer Survey Drops to a 12-Year Low
A Negative view: The February survey of household sentiment showed that expectations for income, business, and labor-market conditions fell to a jaw-dropping 65.2, a 12-year low. A level below 80 often signals a recession, according to the Conference Board.
And it’s not just forward data – Consumers’ view of the current situation fell to 92.9, V 93.5 expected, down 7.2 MoM, marking four straight months of declines.
Still, there were silver linings, such as the view on labor markets –
33.6% of consumers said jobs were plentiful, no change from the previous month, while 15.7% disagreed, claiming that jobs were hard to get, which was also unchanged from 16% in February.
Inflation remained a major concern, with consumers outlining trade policies and tariffs as root causes.
The Fed balances real-time data with these surveys, as do Wall Street and other analysts, looking for cracks in the economy. So far, nothing has translated into actual reports, which naturally lag these leading indicators. Unfortunately, these turn out to be self-fulfilling prophecies towards a vicious downward cycle unless turned around quickly.
The Fed’s dilemma to balance and maintain the dual mandate of full employment and low inflation continues, as soft data from forward-looking surveys convey anxiety about the economy, data which has yet to show up in current reports such as monthly payrolls, unemployment claims, the JOLTS report, or the GDP numbers. Should these weak surveys show up in the jobs numbers, the Feds would have a hard time justifying rate cuts to goose the economy given stronger and stickier inflation.