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September 24, 2019 Blog 1 min read
Why are consumers a bit more anxious about the outlook for the economy? It’s a familiar story.
9-24-19 Consumer Confidence Index Chart“The consumer mood unexpectedly softened in September. Consumers see the volatility in equity markets and the escalation in rhetoric with China and recognize that risks have risen. They may not fully understand what the impact of tariffs and trade disruptions may be, but they certainly recognize that it’s not good.”

The Conference Board’s measure of consumer confidence declined sharply in September to 125.1, falling well short of expectations.

Consumers were less upbeat in their assessment of the current state of the economy, labor market conditions, income expectations, and in their outlook for the direction of the economy in the months ahead.

Over much of the past year, consumers have remained relatively upbeat in their views, despite the obvious slowdown in the economy and the simmering relationship with China. Even so, gauges of confidence have been as volatile as the state of trade negotiations over that time, rising and falling as the prospects for an agreement with China evolved.

Despite the setback, consumers are still relatively optimistic. Household spending has remained on a positive track and will need to remain on course as a critical prop under growth. With business investment and trade both weighing on the economy, the importance of consumer spending at this juncture can’t be overstated.

This makes continued strength in labor markets and income growth even more important. For now, the consumer sector has been resilient and the spillover from other parts of the economy has been contained. For the economy to continue to power ahead, that will need to continue.
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Plante Moran Financial Advisors (PMFA) publishes this update to convey general information about market conditions and not for the purpose of providing investment advice. Investment in any of the companies or sectors mentioned herein may not be appropriate for you. You should consult a representative from PMFA for investment advice regarding your own situation.