58734
Economists say consumers are likely opting for caution until the new  administration offers more details on the  fiscal stimulus, especially tax cuts.
Economists say consumers are likely opting for caution until the new  administration offers more details on the  fiscal stimulus, especially tax cuts.

Americans Less Confident About Business, Jobs Outlook

The Trump rally effect on US consumer’s hearts and minds is starting to fade as it is apparent that his administration will face a rocky road if it does not tone down its harsh rhetoric

Americans Less Confident About Business, Jobs Outlook

US consumer confidence retreated from a 15-year high in January likely as some of the election euphoria fizzled, but households remained upbeat about the labor market, suggesting that the economy would continue to grow this year.
Other data on Tuesday showed acceleration in house prices in November, which should further boost household wealth and support consumer spending even as wage growth remains moderate. Consumer sentiment surged in the aftermath of Donald Trump's election as president last November, Reuters reported. 
The jump was in tandem with a stock market rally as both consumers and investors focused on Trump's pledge to cut taxes and reduce regulations, policy proposals that have been viewed as pro-business and favorable for economic growth.
"The moderation in consumer optimism is likely attributable to a return to normalcy following the typical bounce in confidence that follows a presidential election," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.
"The bottom line is that the consumer sector is still... poised for further spending growth in the coming months, providing a key support to the economy as a whole."
The Conference Board said its consumer confidence index fell to 111.8 this month from an downwardly revised reading of 113.3 in December, which was still the highest since August 2001. The index was previously reported at 113.7 in December.
While consumers' assessment of current business conditions improved sharply this month, they were less confident about the outlook. Some economists said consumers were likely opting for caution until the Trump administration offers more details on the fiscal stimulus, especially tax cuts.
"The Trump rally effect on consumer's hearts and minds is starting to fade as it is apparent this administration will face a rocky road if it does not tone down its harsh rhetoric," said Chris Rupkey, chief economist at MUFG Union Bank in New York.
"The longer it takes the Trump administration to come out with specific proposals and programs to make America great again, consumers will continue to stay cautious."
The survey's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, rose to 5.9 percentage points from 3.3 points in December.
This measure, which closely correlates to the unemployment rate in the Labor Department's employment report, suggests that the jobless rate and labor market slack could decline further this year.
Trump Roils Markets
US financial markets were little moved by the data, with investor attention focused on comments by Trump, which appeared to express concerns about the value of the dollar.
In comments directed to the pharmaceutical industry, Trump said currency devaluation by other countries had increased drugmakers' outsourcing of their production and called on the companies to make more of their goods in the United States.
The dollar fell against a basket of currencies, while prices for US government bonds rose. Stocks on Wall Street were trading lower, with investors continuing to fret over Trump's isolationist policies, including travel restrictions to the United States which sparked protests across US cities and criticism from several corporate leaders.
Other data on Tuesday showed the S&P CoreLogic Case-Shiller composite index of home prices in 20 metropolitan areas increased 5.3% in the 12 months to November after rising 5.1% in October. While the acceleration in house prices offers a boost to households, it could restrain home sales.
Mortgage rates have risen above 4%, while wage growth remains moderate. In a third report, the Labor Department said wages increased 0.5% in the fourth quarter after a similar gain in the previous period.
That slowed the year-on-year rate of increase to 2.3% from 2.4% in the year to September. While the quarterly data continues to show moderate wage growth even as the labor market tightens, anecdotal evidence points to an acceleration amid efforts by companies to retain and attract skilled workers.

Short URL : https://goo.gl/qsNALk
  1. https://goo.gl/VjtC2g
  • https://goo.gl/9Ipz7Q
  • https://goo.gl/OI7Afj
  • https://goo.gl/hCRghP
  • https://goo.gl/TPcwg4

You can also read ...

China Challenges US Solar Panel Duties
China says it is challenging a US tariff hike on solar panels...
In a retaliatory move, President Recep Tayyip Erdogan’s government on Wednesday announced higher tariffs on some US imports, namely on passenger cars (120%) and leaf tobacco (60%).
Turkey has raised tariffs on some US imports, including...
World trade volume growth peaked in January at almost 5.7% year-on-year but nearly halved to less than 3% by May.
Cyclical indicators point to slower and more uneven growth in...
File picture of Kim Jong-un (L) and Moon Jae-in at the truce village  of Panmunjom, South Korea.
South Korea President Moon Jae-in on Wednesday offered a bold...
Moody’s Predicts Slower Fiscal Progress in S. Africa
South Africa’s fiscal consolidation will be slower than the...
Nigeria CPI Drops to 11.14 Percent
Nigeria’s National Bureau of Statistics says the consumer...
Surging Inflation Mars Philippines Growth
The Philippine economy in 2018 is a story that can be summed...
Transport tickets and fuel have driven up costs for consumers.
Inflation in the UK climbed in the month of the July, as had...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus