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October 30, 2018 Blog 1 min read
Despite talk of tariffs, despite the sharp divide in Washington, despite rising interest rates and market volatility…..despite any number of potential sources of concern, consumers remain stoic and they remain confident.

10-31-18 CC Chart

The Conference Board’s measure of consumer confidence improved in October to 137.9, beating economist expectations and rising from September’s revised reading of 135.3. That improvement reflected an improving assessment of both current conditions and a rosier disposition about the near-term outlook.

As has been the case for some time, the strength of the labor markets continue to play a critical role in supporting the overall consumer mood. With unemployment and layoffs both near half-century lows and job creation still running strong, consumers feel good about their current circumstances.

Overwhelmingly, consumers see jobs as being easy to find, which also suggests greater possibilities for those already employed to change jobs, creating a positive ripple effect. As workers “move up” into more attractive positions, an opportunity is created for others to back fill those vacated jobs as well.

All of this points to the intense competition for skilled labor, the growing need for job training to fill open positions, and the potential for stronger wage gains. While formal data on hourly wages still suggest moderate growth, anecdotal evidence indicates that wage growth across various industries and regions has picked up.

Recent equity market volatility has not been fully reflected in recent surveys on the consumer outlook and could still have a dampening effect should it persist. Still, as long as the economy remains on track, any negative effect from a brief downturn in the stock market should be short lived.

Ultimately, the consumer story remains largely unchanged. Jobs are plentiful and the economy remains on a solid growth trajectory. Consumers see that, and remain quite upbeat about their situation. That bodes well for consumer spending, and should support the current virtuous cycle in the economy.

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