Despite growing worries about a recession induced by attempts at curbing inflation, consumer confidence has risen for the second month in a row, according to business research association The Conference Board.
The Conference Board's monthly Consumer Outlook Survey shows that Americans are less pessimistic about the current state of the economy and the future of the economy. The Present Situation Index rose nearly five points from 145.3 to 149.6, and the Expectations Index, which covers short-term economic outlooks, rose from 75.8 to 80.3. However, The Conference Board's Leading Economic Index, a barometer of metrics influenced by manufacturing, financial markets, housing, and jobs, has gone down for the sixth consecutive reading in a row. Experts at CNBC report that this signals a recession is looming despite the consumer outlook being generally positive. Additionally, the Bureau of Economic Analysis recently reported that the overall gross domestic product (GDP) shrank two quarters in a row, signaling a recession in the strictest definition of the term.
As for why consumers are unfazed by this potential economic downturn, lowered gas prices and abundant jobs are key. How heavily consumer confidence correlates with fuel prices is shocking to many experts, says Keith Buchanan, Portfolio Manager at Globalt Investments. Prices for a gallon of gas have fallen for 99 consecutive days and are well below the outrageous numbers consumers saw at the pumps in June. Consumers' purchase intentions for cars and appliances are also higher than in previous months, as plentiful job opportunities are seen as a sign that elevating one's economic status is not only possible but likely.
"It looks like consumers are not too worried," said Melissa Brown, Global Head Of Applied Research at Qontigo. "It does suggest an economy that can continue to grow. But I think that specter of inflation is out there and is kind of overhanging other good news."
