The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Waning Confidence ?

01/30/2019

Did you ever wonder about the relationship between the economy and the elected children in Washington?  Of course, you did!

Normally, consumer confidence increases as the job market improves.  However, even with a continuing good job market. consumer confidence has fallen for three straight months.  This is unusual.  Three months ago, consumer confidence was approaching 140.  Now, it is 120, which is still good, but the trend line is worrisome.  So far, consumer spending, which is two-thirds of GDP, is still holding up but is sure to slip under the increasing weight of Washington.  If consumer confidence dropped 20 points due to the Shutdown, imagine another the impact of another shutdown or failure to raise the debt ceiling next month.

Some believe the economy is the only thing that is going right in this country.  That may be true but only in the short run.  In the long run, we are still the “innovation nation,” driving more research and improving technology faster than any other nation.  God help us if the elected children in Washington smother that as well.

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