Consumer confidence is an important signal for the economy’s future direction because the worse people feel, the less likely they are to make major purchases. And since consumer spending is the country’s major engine of economic growth, worsening consumer confidence could forecast a slowdown ahead. Economists have been watching for signs that the U.S. economy could be headed for a recession in the near future, dragged down by inflation, supply chain problems, and other woes. Other recent measures of consumer confidence, including a report by The Conference Board on Tuesday, have showed sentiment slumping, mainly because of inflation. However, the decreasing confidence has yet to dent consumer spending, since household budgets are being supported by a robust job market as well as savings built up during the pandemic, economists at Wells Fargo Securities noted. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
