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Investor Update: What Key Indicators Are Saying about Economy

PART:
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Part 3
Investor Update: What Key Indicators Are Saying about Economy PART 3 OF 7

US Consumer Confidence Rose Sharply in March

US consumer confidence

The US Conference Board Consumer Confidence Index showed a massive improvement in March 2017. It was at 125.6 in March compared to 114.8 in February 2017. It beat the market expectations of 113.9.

US Consumer Confidence Rose Sharply in March

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This index gives information from surveys throughout the United States (QQQ) (SPX-INDEX) (IVV) (IWM) about what consumers buy and their sentiments toward products and services.

The index showed improved figures, as consumer sentiment toward the economy is on the rise. Expectations about the business climate, personal income, and labor market conditions improved. In the previous part of this series, we discussed that consumer spending played an important role in 4Q16 GDP growth.

Impact on the market

Since the US election, we have seen that the market is showing a strong rally. However, in March 2017, we saw that the market showed some pullback. President Trump’s efforts to replace the Affordable Care Act are failing so far, which has weighed on the index. The delay in policy reform is worrying some investors. Some investment firms are waiting for a change in policy so they can reevaluate their positions accordingly.

However, the stronger improvement in US consumer sentiment is showing that investors are optimistic about the US economic outlook (SPY) (VFINX). This sentiment might drive the market higher.

In the next part of this series, we’ll analyze the performance of the Germany Ifo business climate index in March 2017.

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