January Convention Board confidence index is available in at 104.1 vs. 105.7 Bloomberg consensus, down from 109.5 in December. A 5.4 level decline is about 1 customary deviation (2021M07-2024M12). Extra apparently, expectations (versus present state of affairs) can be down.
Supply: Convention Board.
Along with the decline recorded for the Confidence Board’s measure, expectations have additionally deteriorated for the College of Michigan Survey of Customers, in addition to the Gallup ballot.
Determine 1: Univ. of Michigan expectations (blue), Gallup confidence in future (pink), each standardized (demeaned, divided by customary deviation over 1995-2024 interval). NBER outlined peak-to-trough recession dates shaded grey. Supply: U.Michigan through FRED, Gallup, NBER, and creator’s calculations.
Total sentiment/confidence indices have declined for U.Michigan, Convention Board, and Gallup sequence.
Determine 2: Univ. of Michigan expectations (blue), Convention Board confidence, expectations (tan), Gallup confidence in future (pink), each standardized (demeaned, divided by customary deviation over 1995-2024 interval). NBER outlined peak-to-trough recession dates shaded grey. Supply: U.Michigan through FRED, Convention Board through Investing.com, Gallup, NBER, and creator’s calculations.
For completeness, I additionally embody Wells Fargo’s “Animal Spirits Index”, which mixes the SP500, 10yr-3mo time period unfold, EPU, VIX, and Convention Board confidence index.
Supply: Wells Fargo, 28 Jan 2025.
Wells Fargo feedback, concerning the boldness element:
Draw back dangers to the Shopper Confidence Index (and thus the ASI) in 2025 stay. In December, mentions of tariffs elevated in client responses, with 46% of shoppers anticipating tariffs to lift the price of dwelling within the quick time period. Increased tariffs, if imposed, would impart a modest stagflationary shock to the economic system, leading to increased costs and slower financial development. Increased costs would impart a damaging shock to actual revenue development, thereby weighing on development in actual client spending, which might soften buying energy and confidence.
So, even earlier than the imposition of tariffs, their results are being felt.
