Data released today showed a significant decline in the Consumer Confidence index. According to analysts at Wells Fargo, a sharp decline in confidence during September, a month when equity markets rallied, suggests the trade war is beginning to more meaningfully weigh on confidence.
Key Quotes:
“Consumer confidence fell nine points to 125.1, as both present conditions and expectations declined. Confidence had plateaued since the start of the trade war, but the recent escalation seems to have spooked consumers.”
“The U.S. announced the latest escalation in the trade war, which put consumer goods in the crossfire, in August. Tariffs on about 60% of these goods were then delayed until December, which may have stemmed the decline in August confidence.”
“Concerned consumers may be bringing some of their holiday spending forward, meaning tariffs could bite into Q4 spending. Decreased confidence could weigh on consumer spending, but consumption should remain a key engine of growth in Q3.”
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