| In his 1734 poem “An Essay on Man”, Alexander Pope coined the phrase “Hope springs eternal in the human breast,” which, over the centuries, has been whittled down to the now popular idiom “Hope springs eternal.” The phrase suggests that optimism and the belief in a brighter future are enduring aspects of human nature. Looking at the pickup in Consumer Confidence from last week, as shown in the chart of the week below, it would appear U.S. consumers’ optimism in a brighter future has made its way into consumer outlooks. This is likely a result of the recent progress made in trade deals between the U.S. and its key trading partners, easing angst about runaway tariffs crimping consumer demand and accelerating inflation in the U.S. U.S. Consumer Confidence Biggest Increase Since March 2021
Tariffs were also the focus of recent court decisions this past week, with a federal trade court ruling the recently announced tariffs were outside the scope of legal authority. This ruling was quickly rebuked by a federal appeals court that has temporarily reinstated the Trump Administration’s tariffs. While optimism has picked up, the events of last week only added to already high uncertainty related to the future state of tariffs and trade in the U.S. and their resulting impact on consumer spending. On the point of the consumer, this week will bring key data on the latest state of the labor market, which remains the bedrock of consumer spending. The week will start with job openings on Tuesday and end with the all-important non-farm payroll number and unemployment rate on Friday. The report on layoff announcements, sandwiched in between but not to be overlooked, may offer insight into the future trajectory. With government layoffs apparently easing, investors will be looking for the state of private sector layoff announcements to gauge the health of private sector employment. A decline in overall layoffs will likely bring consumers a sigh of relief. As the saying goes, “hope springs eternal.” |
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