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March 26, 2019 Blog 1 min read
Consumers certainly aren’t euphoric, and they may be less upbeat than they were just a month ago. Still, they remain broadly optimistic.
3-26 Consumer Confidence The Conference Board’s measure of consumer confidence declined in March to 124.1, falling well short of expectations of 132.5. Confidence had rebounded in February to 131.4 before reversing its course and drifting lower in the past month. The survey indicated that consumers’ views on both current and future conditions softened.

A variety of factors have weighed on the collective mood in recent months. Most recently, weaker than expected jobs data in February may have created a headwind, although unemployment remains very low and there continue to be signs that wage growth is picking up.

Some moderation in consumer spirits is to be expected given the slowdown that is readily apparent across a range of measures of the strength of the economy. While we wait for the first official report, first quarter growth is widely expected to be weak. The shutdown of the federal government is widely believed to have shaved perhaps a half-point off growth for the quarter. That comes on top of what appears to be factors related to residual seasonality that have typically been a drag on reported first quarter growth numbers for many years.

There’s no reason to believe this year’s result will be any different, so a preliminary estimate for the pace of expansion in the first quarter could easily come in well below 1.0%. More telling will be the second quarter, and whether the economy rebounds sharply as it typically has over the course of many years.

Despite the slowdown in the pace of growth and a moderate decline in sentiment, consumers still expect the economy to grow in the coming months. Supported by strong labor market conditions and better income growth for most households, consumer spending should continue to be a primary driver for the economy.
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