Since January 2015, our monthly Bespoke Consumer Pulse Report has shown that the share of consumers that expect a deteriorating labor market in the US is trending higher. Interestingly, at the same time we haven’t seen an increase in the percentage of consumers concerned about losing their own job. This divergence is fascinating and an excellent indicator that the economy and labor market are much stronger than popular perceptions.
Not only that, but consumers should be feeling good for a number of other reasons. First, gas prices tend to be a great predictor of overall sentiment and with cheaper gas, consumer sentiment has recently picked up with regards to the economy.
In addition, current income growth has improved after seeing a negative streak for three straight months. Although nominal income growth slowing isn’t necessarily a bad thing for GDP, the psychology of nominal incomes are important. We analyze that psychology by looking at our tracker for current feelings towards personal finances, which has been trending upwards steadily. While consumers clearly are not ecstatic about the outlook for their finances, they’re still seeing improving conditions. So while consumers expect a slowing labor market, their sentiment around job security, gas prices, and income growth/personal finances should ease some of their concerns.
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