Consumer Confidence Indicates Economic Downturn

U.S. economic growth began to stall as 2018 came to a close and then rose dimly as 2019 began. Equity markets seem to be focused on the global economy’s expansion and contraction, which, in turn, seems to live and die on the news of traders to our East – particularly China and Europe. Every fluctuation appears to happen in response to news of the continued trade tensions between the U.S. and China.

Lynn Franco, senior director of economic indicators at The Conference Board, wrote last week in her report, “Confidence has been somewhat volatile over the past few months, as consumers have had to weather volatility in the financial markets, a partial government shutdown and a very weak February jobs report.”

The 2019 first quarter Consumer Confidence Report showed the return to 16-month lows. Last week the consumer index fell to 124, which was well below its expected 132. And as Franco mentioned, along with the Consumer Confidence Report, the jobs report also showed measly gains that fell well under projections.

Beyond consumer and labor data, housing data signaled a downturn heading toward a contraction. Building permits for new builds fell severely this quarter and the market for top tier homes has been stagnant. This is sure to bleed all over the homes of lesser value as prices inevitably decrease.

Is poor consumer confidence, a poor labor market and a weakening real estate market foreshadowing the economic downturn that most of us have been expecting?

When we speak at our contracted advisors’ workshops, we contrast the financial and real estate markets with physical gold and silver, demonstrating that physical gold and silver react inversely to these markets. If the financial and real estate markets do contract – as the reports are showing they have begun to – history tells us that the value of gold and silver will expand to fill the void. This makes physical gold and silver a great hedge in a time when the economic outlook is uncertain. Contact us today about offering this alternative form of investment to protect your clients’ wealth.