US consumers unphased by recent political noise
A rise in confidence suggests US consumers aren’t phased by the recent noise surrounding Trump’s healthcare and fiscal policies.
| 121.1 |
Conference Board Consumer Confidence readingrepresenting an improvement in the perception of the current economic situation and expectations for the future |
| Better than expected | |
So why are consumers so upbeat?
Consumer behaviour is typically less influenced by day-to-day political headlines than businesses (particularly larger ones), which are naturally more sensitive to the intricacies of any changes in government policy.
Instead, Tuesday's data shows that, against a reasonable economic backdrop, a recent drop in oil prices and above all, a buoyant jobs market, consumers appear to be relatively upbeat. The stock market is also a key factor, and so long as the S&P continues to remain relatively supported, confidence probably will be too.
All this points to a rebound in consumer spending during the second quarter following a disappointing start to the year – we expect GDP growth to come in close to 3% on Friday. That’s one reason why we are likely to see the Fed continue to strike an upbeat tone in its statement on Wednesday.
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