Confidence Holding Up Despite Wealth Losses



In an encouraging sign for 2016 prospects, household confidence held up in January from the prior month despite the big stock market declines—according to a first look at the latest U.S. confidence measures.

  • The stability in confidence was evident in both the consumer confidence and consumer sentiment measures, which are reported separately. The measures stayed nearly steady in the topline metric on a month-to-month basis, but were up noticeably in terms of future expectations.
  • Although the measures held up month-to-month, they are down significantly from a year ago. However, the comparison to a year ago should be taken with a grain of salt. That’s because the year-ago measures received an unusual boost from the initial falloff in fuel prices.
  • An overall measure of confidence calculated by MacroSavvy™ suggests that the spending mood heading into 2016 is holding near the steady levels evident for most of 2015. The 2015 confidence levels were up significantly from the prior year.

See the table summary for more detail.

Impact @Work: Expect the confidence measures to sag in the month ahead as the wealth losses from stock market declines begin to hit home. This likely will temper the spending plans among upper-income households. Spending plans among lower-income households are likely to hold up as long as job market gains persist as expected.

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