The economist in all of us can appreciate consumer confidence. If consumers are more confident, especially after the last recession, would they be more willing to spend? That’s the question.
According to an index from New York research group The Conference Board, that confidence has risen to a new high, one that hasn’t been seen in nine years. The reason is in part due to the better job market. The survey included that these same consumers were unsure on the future outlook and what their plans are to purchase bigger items, like homes, cars and appliances.
And the U.S. election was weighing on those results, according to the survey. Jobs are up. So are wages. But retail sales dropped last month.
“I don’t think much has changed radically from three or six months ago. I’m happy to see it, but I’m not rushing to change my economic forecast,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in New York.
The Bloomberg Consumer Comfort Index fell last week to the lowest point since mid-December. That index focuses on Americans’ views regarding their personal finances and buying climate.
Federal Reserve policymakers’ outlook of employment is giving them another reason to raise interest rates. The Conference Board survey implied that this had some overlap with its data.
But the job market is growing, as analysts are seeing that companies are very actively seeking help, which bodes well for skilled and experienced workers.
However, analysts say that any interest rate increase won’t be a shock to consumers — whether sentiment is up or down. The Conference Board survey reported that 60.2 percent of consumers anticipated higher borrowing costs.