Consumer Confidence: Big Jump in May Despite Trade War

US consumers expect the economy to continue growing at a solid pace this year. The Conference Board’s Consumer Confidence Index unexpectedly jumped to a reading of 134.1 in May, up from 129.2 in April, well above the pre-report consensus. The Expectations Index – based on consumers’ outlook for income, business and jobs this year – increased to 106.6 this month, up from 102.7 in April, also well above expectations.

“Consumers expect the economy to continue growing at a solid pace in the short-term, and despite weak retail sales in April, these high levels of confidence suggest no significant pullback in consumer spending in the months ahead,” said Lynn Franco of the Conference Board. Remember, consumer spending accounts for apprx. 70% of GDP.

Consumers were decidedly more upbeat in May. Those stating business conditions are “good” increased from 37.6% to 38.3%, while those saying business conditions are “bad” decreased from 11.3% to 10.2%. Consumers’ assessment of the labor market was also more positive. The percentage of consumers stating jobs are “plentiful” increased from 46.5% to 47.2%, while those claiming jobs are “hard to get” declined from 13.3% to only 10.9%.

Earlier this month, the University of Michigan reported that its Consumer Sentiment Index had surged to a 15-year high, but much of that data was captured before the US and China slapped new rounds of tariffs on each other’s imports.

The trade war has made for volatile trading on Wall Street and led to concerns that global growth could suffer. A number of businesses and economists also think the 25% tariff on $200 billion of Chinese goods – and the $60 billion Beijing is poised to slap on US goods in retaliation on June 1 – will begin trickling down to consumers soon. President Trump is seeking authority to slap the 25% tariff on another $300+ billion of Chinese goods we buy, which would include almost everything China sells us.

If Mr. Trump gets his way, there’s no way the Chinese can match it with tariffs because we buy so much more from them than they buy from us. But that does not mean the Chinese won’t retaliate in other ways, such as cutting off our imports of so-called “rare Earth minerals” which come almost entirely from China. This could be crippling for several US industries. If you want to learn more about this threat, read this article.

36% of Americans Say Economy Going in Right Direction

Although a broad majority of Americans (63%) remain dissatisfied with the direction of the country, the percentage who say they are satisfied has edged up five percentage points since last month to 36%, its highest point in eight months.

This latest satisfaction reading, from a May 1-12 Gallup poll, is on the high end of the recent trend, which hadn’t surpassed 35% since last October, nor hit 40% since 2005. The public’s improved perceptions of the job market in the country are likely behind the latest increase in general satisfaction with the way things are going in the US.

Yet, this reading remains sharply polarized, as Republicans are nearly five times as likely as Democrats to say they are satisfied with the direction the US is headed, 62% to 13%.

At the same time, government/poor leadership (dislike of Trump) at 23% and immigration at 19% continue to top the list of issues cited as the most important problems facing the country, by a longshot, as they have done in earlier polls.

You’ll notice that Environment/Climate Change ranks a distant 6^th place with only 4% of respondents ranking it as their top concern. You would never know that by listening to the mainstream media – surprise, surprise! Just saying…

Are Democrats Choosing to Lose the 2020 Elections?

I’ll close with the most interesting article I read this week. As I’m sure you are aware, several states have recently passed the strictest abortion laws in decades. Democrat presidential candidates have reacted with outrage and are proposing the most sweeping abortion reforms in decades – including aborting fetuses in the second and third trimesters and even after birth in some cases.

Don’t the Dems know that late-term abortion proposals are very unpopular among a majority of Americans, especially conservatives and religious groups? Don’t they know this very liberal abortion stance could doom their election chances in 2020? So, why are the Dem presidential candidates endorsing them?

If you are also wondering about this, then be sure to read the following article (very interesting, no matter your political persuasion).

I’ll leave it there for today.