No-Confidence Votes for the Consumer
The potential for another bruising budget battle in January, uncertainty over health insurance, and doubt about Fed policy are likely contributing to the sour views.
I have been grousing about soft consumer confidence (as measured by weekly retail sales, auto sales, and housing starts) even as the economic backdrop continues to improve (better employment, a higher stock market, and falling gasoline prices). This week, businesses in general and a major trade organization checked in with their own votes of no-confidence.
Nondefense capital goods--ex-aircraft orders--declined for the fourth month in a row. Year-over-year data is softening again and is likely to grow worse in the months ahead. Capital goods are deferrable but provide long-term growth potential and are indicative of business attitudes regarding the overall economy.
Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.