Greg Gibbs, Director at Amplifying Global FX Capital, notes that the recent Conference Board Consumer Confidence survey showed a surprising further gain in US confidence and a range of sub-measures including on employment.
Key Quotes
“The University of Michigan preliminary confidence reading in March was somewhat below its peak in January. This level is around the peaks in 2004/2007, essentially around the highs since early-2001.”
“The cut-off date for the Conference Board survey is 16-March. The survey covers the first half of March. The US equity market was relatively stable through the first half of March.”
“These consumer surveys do not cover the last weeks of March when the Republican-led House of Representatives failed to pass the Trump-endorsed Healthcare bill.”
“It does appear that confidence has taken a hit since this failure. The following weekly Gallup poll of US economic confidence slipped in the week ended 26 March, taking in the bill’s failure.”
“How much of a hit has confidence taken? The starting point suggests that consumers were very confident in early March. They were buying into the idea that the US economy was on a solid growth path and that the government, led by Trump and Republicans, would further support growth with tax cuts, infrastructure spending, reduced regulation, and bring jobs back.”
“The Healthcare bill was seen as an important first test of the Trump/Republican government. If Trump could ‘fix’ healthcare early in the administration, the public may be able to overlook controversies such as his campaign’s alleged links to Russia, and it would enhance the perception that he is a deal-maker that can control Congress.”
“The Healthcare bill failure takes considerable gloss off this perception. The risk is that the public turns its attention to Trump’s foibles, of which there are many.”
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