Despite forecasts from leading economists predicting a recession, U.S. consumer confidence is currently at the highest levels in almost 19 years.
The Conference Board Consumer Confidence Index is at a steadfast high, slightly declining in August to 135.1 from 135.8 in July, according to the business research group, indicating U.S. workers and consumers are confident in their economic position.
After falling to 121.5 in June, the first time it dropped in three months, the index has basically been stagnant, said Lynn Franco, the senior director of economic indicators at the Conference Board.
The current 135.1 August reading compares to a 59.2 reading after the same two and a half years of the Obama administration. The Index plummeted to 40.9 in October 2011 and never rose above 103.8 for Obama.
The Confidence Index is a monthly survey that scientifically measures consumer’s attitudes and expectations toward the economy in percentage increases and decreases from a 1985 base reading of 100 during the Reagan administration. Over the last four decades, the Index averaged 96, reflecting a protracted period when “real” (inflation adjusted) middle-class incomes fell by 11.5 percent.
“Consumer confidence was relatively unchanged in August, following July’s increase,” said Lynn. “Consumers’ assessment of current conditions improved further, and the Present Situation Index is now at its highest level in nearly 19 years (Nov. 2000, 179.7).”
Respondents who perceive jobs are plentiful rose to 51.2 percent, the highest since September 2000, as the percentage who believe jobs are hard to get declined to the lowest in three months.
“The level of confidence could allow for sustained household spending that remains a mainstay of the economy,” Bloomberg reports.
Economists closely monitor consumers’ spirits because their spending accounts for about 70% of U.S. economic activity. The public’s optimism about the economy tend to result in more money spent on goods.
During the Obama administration, Wall Street economists regularly overestimated consumer confidence, yet have significantly underestimated consumer confidence during the Trump administration.
Their mid-July 2019 forecast predicted the Index would drop to 125.0, when it spiked 9.4 points to 135.7 from 124.3 in June.
Corporate media pundits in conjunction with Wall Street and Bloomberg economists regularly try to convince the public to anticipate a recession. Yet, the economy continues to smash expectations amid the Trump administration’s removal of a record-number of federal regulations, tax cuts and a robust economy.
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