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Economy
01 February
Consumers send mixed signals as confidence declines in January
The Conference Board found that consumer views of the current economic situation is improving, but they aren't as optimistic about the next six months.

U.S. consumer confidence declined in January as concerns about the economy over the next year clouded their thinking.
The news: The Conference Board Consumer Confidence Index fell in January to 107.1, down from an upwardly revised 109 in December.
But there’s nuance between how consumers view today and the next year. Consumers’ view of the present economic situation and labor market conditions ticked up. The fall in optimism was observed in the short-term outlook, indicating there are concerns about where the economy is heading in the next six months.
“Consumers were less upbeat about the short-term outlook for jobs,” said Ataman Ozyildirim, senior director of economics at The Conference Board. “They also expect business conditions to worsen in the near term. Despite that, consumers expect their incomes to remain relatively stable in the months ahead.”
Purchasing plans were another area of mixed messages. Consumers held steady in their thinking about buying autos and appliances, but fewer consumers are planning to buy a home.
On inflation, expectations ticked up. Consumers now see inflation at 6.8% over the next year, as opposed to 6.6% a month ago. Yet this is down from the peak of 7.9% observed in June 2022.
Key demographic stat: “Consumer confidence fell the most for households earning less than $15,000 and for households aged under 35,” said Ozyildirim.
It’s a reminder: This more difficult economic moment likely isn’t affecting everyone in the same way.
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Economy
10 March
The US economy added 311K new jobs in February
The labor market is hot. Will the Fed do more to cool it off?
The U.S. economy continued to add new jobs in February, as the unemployment rate ticked up to 3.6%.
Data from the U.S. Bureau of Labor Statistics for February 2023 showed the following:
The economy added 311,000 new jobs, driven by gains in leisure and hospitality, retail trade, government, and health care.
Retail trade added 50,000 jobs in the month, driven by employment gains at general merchandise stores of 39,000.
Unemployment edged up to 3.6%.
Average hourly earnings rose by 8 cents, or 0.2%, to $33.09.
What it means for brands and retailers: In short, jobs are a key indicator of consumer demand, and they remain robust.
While the number of new jobs added was slightly below the 6-month average of 343,000 and January’s whopping gains of 504,000, the data provides another indication that the job market remains hot. Unemployment remains at historic lows, and has changed little over the last year despite ticking up slightly this month. Wages are still increasing, as well.
Overall, the jobs report keeps the narrative about the consumer picture the same: A healthy labor market is providing fuel to keep consumers spending, even as concerns about higher prices from inflation continue.What it means: In short, jobs are a key indicator of consumer demand, and they remain robust.
What it means for the Fed: This report could also influence how the Federal Reserve moves on interest rates, which are being hiked to bring inflation down and have the side effect of cooling demand.
The jobs report underscores the dual nature of any economic news at a time when high prices are continuing to put pressure on the economy as a whole. Economists are particularly concerned about data that showed consumer spending was up in January and global manufacturing output picked up in February. Put that together with the strong jobs report, and there are concerns that inflation will remain too hot, and the Fed will have no choice but to keep tightening to bring it down.
“Normally, a strong jobs report would be cause for celebration, but it can be hard to distinguish between ‘bad’ and ‘good’ economic news right now," said Joel Beal, CEO and CPG analyst at Alloy.ai. "Interest rate expectations are currently driving everything, so good economic numbers only increase the likelihood of higher interest rates, which escalates pessimism about future growth.”
In testimony before Congress this week, Chairman Jerome Powell said the central bank may consider returning to a faster rate increase of 0.5% after slowing down to 0.25% in February.
“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Mr. Powell said before the Senate Banking Committee on Wednesday. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
Another hot jobs report could bolster that case, but Powell said no final decision has yet been made.
In the bigger picture, Powell has suggested that it may be possible to bring down inflation without seeing unemployment rise. We'll get more data on whether that scenario is playing out when the government releases the latest Consumer Price Index next week.
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