American consumers are becoming less confident in the state of the United States economy as the country struggles with an up-and-down stock market, the repercussions of the government shutdown and a disappointing jobs report.
The monthly index compiled by nonprofit research group The Conference Board found that U.S. consumer confidence in March slumped after a nearly 8 percent boost in February — when it showed the first sign of a rebound after three months of declines. The index, which stands at 124.1, is down 7.3 points from last month and represents the second-lowest rate in a year.
“Confidence has been somewhat volatile over the past few months as consumers have had to weather volatility in the financial markets, a partial government shutdown and a very weak February jobs report,” said Lynn Franco, senior director of economic indicator.
Wall Street saw a turbulent start to 2019 following the worst year of trading since the 2008 financial crisis. After a brutal December, the stock market recovered with the best January it had seen since the 1980s — but continues to be held back in the past month as a result of political uncertainty, trade war concerns and fears over a global economic slowdown.
Watch on FN
The 35-day partial government shutdown, which marked the longest in American history, also proved detrimental to the marketplace. Coupled with bitter winter weather and a post-Christmas lull, several retailers in the Washington, D.C., region had already recorded a drop-off in sales — and the outdoor industry, due to the deteriorating shape of National Parks, was no exception.
“We’re in a wear-now economy; people are not purchasing products in anticipation,” Matt Powell, senior sports industry adviser with The NPD Group Inc., previously explained to FN. “As they’re going to take a trip, they’re going out and outfitting themselves in whatever they need. If the parks are closed and they’re not making that trip, then that purchase is not getting made.”
Additionally, February was the weakest for job growth in 17 months, with American employers filling only 20,000 new positions — the fewest gains since September 2017, when two destructive hurricanes swept through the United States to curtail employment. (The retail sector’s losses amounted to 6,100 jobs.)
“Despite these dynamics, consumers remain confident that the economy will continue expanding in the near term,” Franco added. “However, the overall trend in confidence has been softening since last summer, pointing to a moderation in economic growth.”
Why Consumer Confidence Is on the Rebound After Three Months of Declines
Retail’s February Job Numbers Were Impacted by This Now-Bankrupt Chain