Regular consumers don’t think the stock-market chaos will wreck the US economy.
That’s according to the Conference Board’s consumer confidence index released Tuesday, which came in stronger than expected, at 98.1 for January.
Economists had estimated that the monthly index was 96.5, unchanged from the prior reading.
In the release, Lynn Franco, director of economic indicators at The Conference Board, said, “Consumers’ assessment of current conditions held steady, while their expectations for the next six months improved moderately. For now, consumers do not foresee the volatility in financial markets as having a negative impact on the economy.“
Since stocks had their worst start to a year ever, there has been renewed talk, and panic, about how close the US economy is to recession. And for the majority who aren’t on Wall Street or invested in stocks, this is the real concern that stems from the sell-off.
Other commentators have pointed out that historically, stock sell-offs are not always followed by recessions. And at the moment, consumers remain positive about the economy, according to the Conference Board, even as a greater share of people said business conditions are “good” versus those who said they are “bad”.
Optimism about the short-term economic outlook and the labour market also improved slightly.
“The increase [in consumer confidence] is rather surprising given the volatility in equities in the month,” wrote BNP Paribas’ Brycklin Dwyer. “A resilient labour market and low gasoline and utilities prices seem to have offset any negative sentiment stemming from financial markets.”