One thing that moved markets 

… is an evolving consumer sentiment, with mixed reviews on how Americans feel about the economy in the present versus in the future.

According to the latest survey from the Conference Board, consumers’ assessment of current business conditions improved, but expectations for the next six months fell to their lowest level since October 2023.¹ 

Largely driven by a positive outlook on today’s job market, the online panel of more than 36 million consumers expressed rising confidence month-over-month in the present economy. Consumers’ view of current conditions improved to 151.0 from 147.6, per the Conference Board’s index. 

On the other hand, expectations around business, income, and even labor markets over the next six months all declined, as elevated interest rates and concerns over food and gas prices weigh on consumer mindsets. The index comprising these various components fell to 73.8, with analysts saying a reading below 80 may signal a recession on the horizon. However, respondents said they believe a recession appeared less likely over the next year. Their outlook on the stock market remained strong. 

Money on the mind 

Consumers largely drive the economy, with their spending accounting for roughly two-thirds of the U.S. gross domestic product, or the monetary value of the country’s goods and services.² Naturally, then, the way people feel about the economy impacts the market – especially if their outlook remains cloudy.  

Perspectives like the ones in this read from the Conference Board are a useful finger to the wind. Surveys provide insights that differ from hard data like pricing indices and retail sales: Perceptions often guide habits, and sentiment can be an important economic indicator of future behaviors. 

Based on this Conference Board survey, consumers’ current optimism may be positive for spending and business activity in the short term. Another survey from the same period, this one from the University of Michigan, showed consumer sentiment rising to the highest level since July 2021.³ 

And a few top headlines 

1. Amazon is expanding its same-day pharmacy delivery service to additional metropolitan areas Los Angeles and New York City, adding to the cities it already services, including Austin, Miami, and Seattle.⁴ 

• With consumers largely sticking to traditional prescription pickup at in-store pharmacies, this expansion underscores the effort to capture wallet share of healthcare purchases. 

2. Tesla will offer a one-month free trial of its full self-driving (FSD) subscription service to drivers of compatible vehicles.5

• The driver-assisted software, priced at $12,000, may be a boon to the EV maker in an industry facing price competition pressures.⁶ As a subscription, the company’s FSD option costs $199 per month for most customers in North America.

What to be on the lookout for next week 

The ISM Manufacturing and Services Purchasing Managers’ Indexes (PMIs) are due Monday and Wednesday, respectively. These reports are key measurements of manufacturing activity across the U.S.

Since October 2022, manufacturing activity in the U.S. has contracted every single month. Meanwhile, services activity has expanded every month since December 2022.⁷

While there are many ways to measure the health of an economy, these indices are frequently viewed as leading indicators for where the economy is headed, as they are based on insights from executives at the forefront of their respective industries. Each index’s monthly trend (or a sharp rise or fall in either) can signal what may be in store for the economy in the coming months.