Tuesday, September 30, 2014

Drops in Consumer Confidence

In an article from WSJ, a drop in the consumer confidence index, possible reasons for the drop, and expectations are discussed.  

Looking at possible reasons, "Paul Dales, senior U.S. economist at Capital Economics, said high equity values, rising home prices, and falling gasoline costs indicate that 'confidence should be rising not falling.' He expects the index to rebound before long."  Since the expectations contradicted the drop in consumer confidence, a possible reason in the article is indicated by consumers having a less positive assessment on the job market.  The article also indicates that the drop in confidence has raised questions about consumer spending going forward (in other words, what is to be expected?).   

Based on this article: drop in consumer confidence, the numbers provided, possible reasons, expectations, and the article's link to the labor market, what are your comments?

Potential ideas for conversation could be your personal outlook based on the numbers, was this "unexpected" really unexpected, possibly what you think about influences from international economics at the moment and it's influence on consumer confidence, expectations in the labor market, etc.

http://online.wsj.com/articles/september-u-s-consumer-confidence-unexpectedly-drops-1412086973

2 comments:

  1. It seems to me like people are still quite wary about the economy. I think many "big-time" investors are also holding back until it becomes more obvious that the economy is on the mend. Just look at the market falling today, due to instability around the world, especially with the China- Hong Kong situation. Similarly, consumers are not confident that the economy is in a full rebound. I think we are moving into a world that is much more conscious about global activity, so unless the other "big" powers are doing well, our economy won't perform well. Europe is still ailing, China looks unstable; unless these issues resolve themselves, I don't see consumers getting back on track to past levels of spending.

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