Latest Consumer Confidence and No Data

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses consumer confidence.

• With most of government-produced economic data under shutdown, the focus has turned more keenly to privately produced data.  Today’s data on consumer sentiment from the University of Michigan is not good news, however.  People felt worse in the first part of October.
• Consumer sentiment index fell in October, no doubt influenced by Washington dysfunction.  But the index had also fallen in the two prior months.  The latest read of 75.2 is the second lowest monthly figure this year.  The economic expansion, albeit it has only been plodding along, could be in jeopardy if consumers continue to express pessimism.  As of now, the economic growth in the fourth quarter will take a modest hit such that the GDP growth rate is less than 2 percent (from previously projected growth of 2.5 percent)
• Retail Sales is one of the data missing in action.  No information for September.  Up to August, retail sales had been making steady progress.  Retail spaces were thereby getting absorbed and pushing down the vacancy rates.  Now what will happen?
• The producer price index is also missing in action.  Though less critical than the consumer price index, all the inflationary pressure coming out of producer prices would be valuable information on gauging how slowly to taper printing of the money.  To August, the producer prices had been fairly tame.
• The frustrations of not able to visit a national park or the halting of USDA mortgage loans are real.  But the bigger impact to the national economy from unruly politicians appears to be the indirect impact of hammering down consumer confidence.  How satisfying it would be if there was an app to “Delete All” for current elected officials.