U.S. Outlook: Are confidence gains becoming delusional?
Alan Greenspan coined the phrase “irrational exuberance” to describe the disconnect between stock market gains and economic fundamentals in the late 1990s.
For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on March 31.Key observations:
- Nowhere has the surge in confidence been more visible than with the Conference Board’s Consumer Confidence Index, at a high we’ve rarely seen.
- A big driver of consumer confidence is coming from consumers’ evaluation of the labor market today and in the future.
- Outside of the labor market and business and consumer confidence surveys, the U.S. economic data has been generally mediocre.
- The surge in confidence is a welcome development but warrants investor caution until it’s backed up by real economic evidence of stronger growth.