Since 2010, consumer confidence has been on quite a steady incline. Some months—some years—have been better than others, of course, but consumer confidence in America hit an 18-year high just three months ago, hitting 137.9 in October. But business research group The Conference Board said, on Tuesday, that consumer confidence has fallen again. Down from 126.6 in December, the index fell to 120.2 in January, which is its lowest mark since July of 2017.
Analysts suspect that the partial government shutdown has played a bit of a role in this decline. In addition, unstable financial markets across the globe are not making it any easier to feel safe here in American households, at least financially speaking.
This, of course, probably does not come as much of a surprise to most of us. Simple observation of political turmoil the past year and basic awareness of the government shutdown certainly does not contribute to confident consumers. But another survey from just a few weeks ago mirrors what the Conference Board is saying today.
However, it is important to note that the Conference Board’s cutoff date for this survey was January 17, which was right in the middle of the shutdown. At that time, one-quarter of federal agencies had been shuttere3d since December 22, something that affected approximately 800,000 government employees. With talks of the government restarting and opening negotiations for new policies, this metric could change quickly. Still, the [nonpartisan] Congressional Budget Office warns that the economic impact of the longest government shutdown in US history could be more than $11 billion.
At the same time, the US economy is otherwise healthy. From July to September, for example, economic growth hit a steady annual pace of 3.4 percent annual pace. And even as good as this is, it is still down from its 4.2 percent surge in Q2. In addition, the unemployment rate is near a five-decade low below 4 percent and the US stock market shows steady—but somewhat slow—growth since suffering heavy losses last year, so all the other numbers should indicate consumer confidence is high.
With global growth slowing and the US and China amidst a bit of a trade war, the government restart could be just what the country needs to start moving in the right direction again.