Consumers views on the present situation for business and labor market conditions fell this month, but their expectations for the future rose. Conference Board economist Lynn Franco said that consumers continue to view the outlook as favorable, and when this is combined with solid employment growth, it should be enough to support continued spending and economic growth in the near term. Consumer spending has been the driving force in the current economic expansion, now in its 11th year.
Other analysts noted that this survey came too early to get a good read on the effect of the escalating coronavirus outbreak in China. But many said that given how high confidence has remained through the U.S.-China trade war and other shocks, the virus may not have that big of an impact as long as the stock market rebounds in coming days.
“The main reason (confidence) is hanging at such lofty levels — strong hiring — isn't going away any time soon,” said Robert Frick, corporate economist with Navy Federal Credit Union. Surveys of consumer sentiment are closely followed for clues about whether households remain in a buying mood. Consumer spending accounts for 70% of economic activity.