July 30, 2019

The Conference Board reported that consumer confidence jumped 10.4 points in July to 135.7 after having fallen 7.0 points in June.  This series reached a cycle high of 137.9 in October which also happened to be the highest level in the  past 18 years.  The July level is very close to its peak level set ten months ago.

Lynn Franco, Director of Economic Indicators at the Conference Board said, ““After a sharp decline in June, driven by an escalation in trade and tariff tensions, Consumer Confidence rebounded in July to its highest level this year.  Consumers are once again optimistic about current and prospective business and labor market conditions. In addition, their expectations regarding their financial outlook also improved. These high levels of confidence should continue to support robust spending in the near-term despite slower growth in GDP.”

Confidence data reported by the Conference Board are roughly matched by the University of Michigan’s series on consumer sentiment.   As shown in the chart below, trends in the two series are identical but there can be month-to-month deviations.  Both series remain at very lofty levels.

The consumer should continue to provide support for overall GDP growth in 2019.  The stock market struggled for several months late last year but has rebounded and has set a series of new record high levels.   The economy continues to crank out 180 thousand jobs per month.  Consumer debt in relation to income remains low.  Interest rates remain low and the Fed has now ceased its series of rate hikes and is even talking about the possibility of lowering rates.

We anticipate GDP growth of 2.7% in 2019 after having risen 3.0% last year.

Stephen Slifer


Charleston, SC