US Consumer Confidence To Ease

The closely-watched Conference Board’s consumer confidence index report will be released today. Unsurprisingly, the median estimates of economists polled forecast that consumer confidence will ease in the month of June.

Still, despite the forecast being pessimistic, it does show that the consumer confidence index still remains higher. The data comes as investors adjust their expectations on the US economy and monetary policy as a result.

Estimates show that the consumer confidence index will slip to 132.0 in June, down from 134.1 in May. The consumer confidence index peaked to 137.9 in October last year. Since then, it has remained close to the October 2018 highs.

Consumer Confidence Index

 

CB Consumer Confidence Index – May 2019, 134.1

The CB’s consumer confidence index has increased steadily over the past two months since April 2019. It fell to 124.1 in March 2019.

Last week, the Fed’s dovish outlook suggested that there is a big chance it will cut rates. However, it is unlikely we will see that happen at least until September. Some corners of the markets expect a rate cut as early as July, which is also unlikely at this point.

Amid growth concerns on various themes including global trade and rising tensions between the US and Iran, consumer confidence is likely to take a small hit.

Even if the consumer confidence data does ease to the expected headline number, the markets will be unmoved by the data. This comes as the US consumer confidence is well anchored near the highs.

But questions remain on whether this optimism will remain in the months ahead. There are various headwinds both economically and geo-politically which could make consumers wary.

Consumer Confidence Index Recap – May 2019

In May, consumer confidence rose to 134.1. This was a beat on the estimates, and the index jumped by 4.9 points from 129.2 in April.

The CB’s present situation index which is based on the consumer’s assessment of the current business and labor market conditions jumped to 175.2, up from 169.0 in the previous month.

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