Consumer Confidence Rises But The Labor Outlook Remains Uncertain

Talking Points:

- Confidence Board reported that Sentiment survey came in at 125.4 beating the estimated 123; previous figure was also revised higher

- Overall assessment of present and business conditions were mixed

- US Dollar Index impact was limited after the sentiment surveyed

- See the DailyFX Economic Calendar for upcoming economic data and for a schedule of live coverage see the DailyFX Webinar Calendar.

This morning, Conference Board Consumer Confidence Index came in at 125.4 for January. The index rose this month following a decline in December at 123.1. As for the Present Situation Index, it also increased, from 156.5 last month to 155.3 in January. Similarly, the Expectations Index rose from 100.8in December to 155.3 in January. According to Lynn Franco, Director of Economic Indicators at The Conference Board, “…consumers remain quite confident that the solid pace of growth seen in late 2017 will continue into 2018.”

In December, consumers were slightly less confident in their assessment of current conditions while their assesssment of business conditions were mixed. 34.9% of consumers said business conditions are “good” compared to 35.8% previously. Conversely, 11.7% said business conditions are “bad” compared to 12.7% previously. Also mixed was sentiment regarding the labor market. The percentage of consumers claiming jobs are “plentiful” rose from 36.3% to 37.6%. Although, those claiming jobs are “hard to get” rose as well from 16.0% to 16.4%.

Consumers’ optimism regarding the labor market was less negative. Those anticipating fewer jobs delcined from 15.9% to 11.8%. Though, the proportions of responders expecting more jobs in the months to come was virtually unchanged at 19%. Overall, the sentiment for January was mixed as much uncertainty remains with trade policies, the effects of the Tax Plan, and the rising risk of protectionism. To see the full Consumer Confidence Survey click here.

Below is a list of economic releases that has had a limited impact on the US Dollar higher:

-USD Consumer Confidence Index (JAN): 125.0 versus 123.0 expected, from 123.1 (revised higher from 122.1)

- USD Conf. Board Present Situation (JAN): 155.3 from 156.5 previous (revised lower from 156.6)

- USD Conf. Board Expectations (JAN): 105.5 from 100.8 previous (revised higher from 99.1)

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Chart 1: DXY 15-minute Chart (January 30, 2018 Intraday)

US Dollar Index barely reacted to the first confidence reading of 2018. The chart above, DXY, shows that DXY traded slightly above 89.11 at the time that this was written.

--- Written by Dylan Jusino, DailyFX Research