Consumer attitudes in the US were surprisingly resilient in January despite numerous geopolitical and economic uncertainties.

Nonetheless, the Federal Reserve is obviously worried about the slowing US economy, why else would it have cut interest rates three times last year. It is therefore quite interesting that American consumers seem impervious to bad news.  

Even though the Fed is understandably worried about the durability of the eleven-year economic expansion, the public seems to be going on with their lives without too much worry. In a nutshell, spending is up, unemployment is low, incomes are rising, and the stock market is booming.

US confidence took a dive last summer after trade talks with China hit an impasse and President Trump threatened to apply tariffs to all Mexican exports in a dispute over security at the Southern border.

Confidence has since rebounded after the Phase 1 trade deal with China was signed. However, relaxing because of the Phase 1 trade pact is a bit of smoke and mirrors.

Indeed, a serious examination of the trade deal reveals that much of the heavy lifting between the US and China was left to a further stage of negotiations, presumably to take effect after the November election is over.

Nonetheless, the White House has temporarily backed off threats of additional tariffs, which clearly eases the anxiety of American businesses and consumers.

Yet the Federal Reserve is still worried about the damage caused by the trade disputes, especially to the global economy. Now of course one must add in the worries about the coronavirus epidemic and the impact it could have on China and the entire global economy.

Americans are notorious for not paying much attention to international affairs. There are so many serious geopolitical concerns, including the conflict with Iran, the impeachment trial, and the onset of the coronavirus.

Currently, however, it is clear that the strong economy, the accompanying strong job market, and the booming equity market offsets any of these other potential worries.