PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Consumer Confidence Rides High

By at 1 November, 2018, 4:24 pm

Small Business Insider

 

by Raymond J. Keating-

Consumer confidence rides high, according to the latest take from the Conference Board.

The board’s consumer confidence measure improved in October to 137.9 (1985=100), up from the September level of 135.3. Breaking this down further, the Conference Board reported:

“The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – improved from 169.4 to 172.8. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – increased from 112.5 last month to 114.6 this month.”

Lynn Franco, Senior Director of Economic Indicators at The Conference Board, reported, “Consumer confidence increased in October, following a modest gain in September, and remains at levels last seen in the fall of 2000 (September 2000, 142.5).” Franco explained the good news among consumers as they look at today and to tomorrow: “Consumers’ assessment of present-day conditions remains quite positive, primarily due to strong employment growth. The Expectations Index posted another gain in October, suggesting that consumers do not foresee the economy losing steam anytime soon. Rather, they expect the strong pace of growth to carry over into early 2019.”

By better than 3-to-1, consumers were positive on conditions for business:

“The percentage of consumers expecting business conditions will improve over the next six months increased from 25.8 percent to 26.3 percent, while those expecting business conditions will worsen declined, from 8.3 percent to 7.4 percent.”

This positive take by consumers also was reflected in the third quarter GDP numbers, as real personal consumption expenditures grew by 4.0 percent and accounted for the bulk of the quarter’s 3.5 percent overall growth.

In the end, it must be kept in mind that consumers are followers. As long as U.S. entrepreneurs and businesses continue to invest and create jobs, consumer confidence will continue to ride high. That’s why it is critical that policies continue on their current path of enabling small business confidence and growth, which means tax reform and relief must continue (and be made permanent) and the current approach to relieve businesses of excessive regulatory must go on.  In addition, opening global markets for business expansion will allow for strong growth, while reducing health care costs will give small businesses the breathing room they need to invest further and raise employee wages.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

 

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