In the broadest strokes, the U.S. economy looks a lot like it did in December. After all, three months isn’t much time to change the outlines of an $18 trillion global powerhouse.
But in December, the Fed raised its interest-rate target. In this week’s meeting, it’s unlikely to raise it again.
So what’s different? How people feel about it.
The economy hasn’t changed significantly, but perception of it certainly has.
Every month, the Conference Board asks consumers about the state of the economy, as well as their outlook, for its much-watched measure of consumer confidence. It also releases the findings as detailed polls providing a snapshot of the American consumer.
The biggest shift came in views about how the stock market will perform next year. (This question always attracts a large share of strong opinions and tends to experience big swings.)
Alongside those worries about stocks was an even more troubling drop in the number of folks who expect their income to rise or at least stay steady in the next year. The share of Americans who expect their income to drop is as high as it has been in more than a year.
And consumers are more worried about the job situation than they were in December, despite continued payroll growth and a falling unemployment rate.
At the same time, their outlook for the job market, which generally tends to be more optimistic, took a small hit despite steady hiring.
And while consumer faith in current business conditions has fallen since the Fed raised rates…
…the more troubling move may be that more believe business conditions are going to worsen in coming months, a shift toward pessimism that echoes consumer worries about stocks, incomes and employment.
Written by Andrew Van Dam of The Wall Street Journal
(Source: The Wall Street Journal)