{"id":269830,"date":"2025-01-28T23:36:05","date_gmt":"2025-01-28T23:36:05","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2025\/01\/28\/economic-confidence-in-the-future-declines\/"},"modified":"2025-06-25T17:09:33","modified_gmt":"2025-06-25T17:09:33","slug":"economic-confidence-in-the-future-declines","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2025\/01\/28\/economic-confidence-in-the-future-declines\/","title":{"rendered":"Economic Confidence in the Future Declines"},"content":{"rendered":"

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January Conference Board confidence index comes in at 104.1<\/a> vs. 105.7 Bloomberg consensus, down from 109.5 in December. A 5.4 point decline is about 1 standard deviation (2021M07-2024M12). More interestingly, expectations (as opposed to current situation) is also down.<\/p>\n

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Source: Conference Board<\/a>.<\/em><\/p>\n

In addition to the decline recorded for the Confidence Board\u2019s measure, expectations have also deteriorated for the University of Michigan Survey of Consumers, as well as the Gallup poll.<\/p>\n

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Figure 1:<\/strong> Univ. of Michigan expectations (blue), Gallup confidence in future (red), both standardized (demeaned, divided by standard deviation over 1995-2024 period). NBER defined peak-to-trough recession dates shaded gray. Source: U.Michigan via FRED, Gallup, NBER, and author\u2019s calculations.<\/em><\/p>\n

Overall sentiment\/confidence indices have declined for U.Michigan, Conference Board, and Gallup series.<\/p>\n

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Figure 2:<\/strong> Univ. of Michigan expectations (blue), Conference Board confidence, expectations (tan), Gallup confidence in future (red), both standardized (demeaned, divided by standard deviation over 1995-2024 period). NBER defined peak-to-trough recession dates shaded gray. Source: U.Michigan via FRED, Conference Board via Investing.com, Gallup, NBER, and author\u2019s calculations.<\/em><\/p>\n

For completeness, I also include Wells Fargo\u2019s \u201cAnimal Spirits Index\u201d, which combines the SP500, 10yr-3mo term spread, EPU, VIX, and Conference Board confidence index.<\/p>\n

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Source:<\/strong> Wells Fargo, 28 Jan 2025<\/a>.<\/em><\/p>\n

Wells Fargo comments<\/a>, regarding the confidence component:<\/p>\n

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Downside risks to the Consumer Confidence Index (and thus the ASI) in 2025 remain. In December, mentions of tariffs increased in consumer responses, with 46% of consumers expecting tariffs to raise the cost of living in the short term. Higher tariffs, if imposed, would impart a modest stagflationary shock to the economy, resulting in higher prices and slower economic growth. Higher prices would impart a negative shock to real income growth, thereby weighing on growth in real consumer spending, which would soften purchasing power and confidence.<\/p>\n<\/blockquote>\n

So, even before the imposition of tariffs, their effects are being felt.<\/p>\n<\/p><\/div>\n

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[ad_1] January Conference Board confidence index comes in at 104.1 vs. 105.7 Bloomberg consensus, down from 109.5 in December. A 5.4 point decline is about<\/p>\n","protected":false},"author":1,"featured_media":269831,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[155],"tags":[],"_links":{"self":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/269830"}],"collection":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/comments?post=269830"}],"version-history":[{"count":0,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/269830\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media\/269831"}],"wp:attachment":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media?parent=269830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/categories?post=269830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/tags?post=269830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}