Look Inside: Economic Outlook Update Q4 2019

The Economic Outlook Update provides monthly and quarterly digests designed to give you the most defensible economic data available at your fingertips when you need it. This excerpt comes from the Q4 2019 issue.

The Consumer Confidence Index decreased 0.3 point in December, to 126.5, although the report did include an upward revision to the November score, improving the figure by 1.3 points. The decline in December marked the fourth
decline in the past five months, with the report noting there is little to suggest that growth, and in particular consumer spending, will gain momentum in early 2020. Consumers’ assessment of current conditions increased 3.4 points, to 170.0 points, but the expectations component decreased 2.9 points, to 97.4. The Consumer Sentiment Index improved 2.5 points in December, to 99.3 points. The December level was 1.0% higher than the score from one year ago. The score came in a tick higher than the 99.2 points Reuters forecasted. The survey noted that the impeachment hearings had a barely noticeable impact on economic expectations, as just 2% of all consumers mentioned it in the December survey. At its peak, consumer sentiment levels averaged 105.3 from 1997 to 2000.

The Wells Fargo/Gallup Small Business Report published its fourth-quarter survey, which highlighted the continued optimism small-business owners expressed regarding their businesses and the U.S. economy. The survey reached a new record high, 142, after rising 6.0 points. The latest survey findings suggest that small-business owners continue to feel confident about the economy and the future of their businesses. Fifty-eight percent of the survey respondents noted that their revenues increased over the past 12 months, which is up 6.0 percentage points. The Present Situation score of the report increased 3.0 points for the quarter, to 67.0 points, and the Future Expectations score increased 3.0 points from last quarter, to 75.0 points.

Since August 2003, the Wells Fargo/Gallup Small Business Index has surveyed small-business owners on current and future perceptions of their business’s financial situation. The Small Business Index is published once a quarter. This index consists of owners’ ratings of their business’s current situation and their expectations for the next 12 months, measured in terms of their overall financial
situation, revenue, cash flow, capital spending, number of jobs, and ease of obtaining credit. Before the recession and financial crisis of 2008-2009, Small Business Index scores were generally in triple digits. The Small Business
Index reached its peak of 114.0 in December 2006 and hit a low of -28.0 in July 2010.