Home > Uncategorized > The US Economic Expansion and Private Consumption.

The US Economic Expansion and Private Consumption.

Adsiduus Capital

The US economy experienced a wild ride of volatility so far this week, with several shaky economic news reports negatively impacting investor sentiment. Looking at the private household sector, consumer confidence, measured by the The Conference Board, saw its index fell to 86.0 in September from 93.4 in August. More importantly for financial markets, the index fell below the expected outcome of 92.8 as gauged by several economists by the Wall Street Journal. We know two things from this: Firstly, economists are never exactly right and always in minor disagreement with their forecasts. Secondly and more worryingly, consumer confidence has it a rough patch.

What does this mean for investors? Private consumption constitute the approximately 68.6% of the US economy, so a hit to private consumption expenditure is sure to cause Janet Yellen to rethink her definition of ‘considerable amount of time’ in keeping interest rate close to 0%. But…

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