Consumer Confidence: Shutdown Crushes Future Expectations

January 29, 2019
Bottom Line: Consumer confidence fell sharply more than expected for the second straight month. While consumers' assessment of the current situation were nearly unchanged and historically strong levels, their expectations for the future fell sharply, hitting the lowest level since October '16, prior to the presidential election. The survey noted the importance of gauging shocks to confidence, like this one due to the government shutdown, and the historical precedent for a strong rebound like was seen after the 2013 shutdown. For now there are certainly hints that could be the case this time given the continued to strength in the present situation index. Consumer Confidence FELL by 6.4 points in January to 120.2, compared with market expectations for a decline to 124.0. The index is now 3.3% BELOW its year ago level. Present Situation Index FELL by 0.3 points to 169.6. The index is 9.6% ABOVE its year ago level. The Expectations Index FELL by 10.4 points to 87.3. The index is 16.1% BELOW its year ago level. The labor differential, the percentage of respondents who said jobs are “hard to get” from the percentage who said jobs are “plentiful” , moved higher by 0.4 points to 33.7.