US Consumer Confidence Falls For Third Straight Month

0
151
views

As the market prepares to receive the latest FOMC rate decision later today, bulls will be little inspired by the recent US data which has, once again, undershot expectations. Consumer Confidence fell to 120.2 in January, down from 126.6 in the prior month and below expectations of a 124.6 reading.

The index has now fallen for three consecutive months and is sitting at 18-month lows. The decline in consumer confidence is mostly attributable to the US government shutdown.

Trading the news requires access to extensive market research – and that’s what we do best. Open your Orbex account now.

The shutdown sprawled over late December and all of January, marking the longest government shutdown in US history, as President Trump’s demand for $5.7 billion in funding for his border wall was staunchly turned down by Democrats.

Alongside the political stalemate, which many economists have said will see weaker US growth in Q1, financial market volatility has also negatively impacted consumer confidence.

The breakdown of the data is far from inspiring. The percentage of consumers forecasting business conditions to improve over the next six months fell from 18.1% to 16%, with those forecasting conditions to worsen, rising to 14.8% from 10.6% previously.

Commenting on the decline, Lynn Franco who is the Senior Director of Economic Indicators at the Conference Board (responsible for releasing the data) said:

“Shock events such as government shutdowns (i.e., 2013) tend to have sharp, but temporary, impacts on consumer confidence! … It appears that this month’s decline is more the result of a temporary shock than a precursor to a significant slowdown in the coming months.”

Technical Perspective

Bullish momentum in the S&P has paused ahead of today’s FOMC meeting though with data continuing to highlight weakness. A more cautious tone from the Fed is likely to keep equities supported.

s&p

Price has currently settled into a triangle pattern, highlighting the contraction in momentum. An upside break will put focus back on an eventual run up to test the next key structural resistance at the 2801.65 level. Any break to the downside should find support at the 2604.37 level.

Join our responsible trading community – Open your Orbex account now! 

The post US Consumer Confidence Falls For Third Straight Month appeared first on Orbex Forex Trading Blog.

This Market Review is presented by Orbex Broker. Click here to open an Orbex Account.