The year-on-year change in consumer confidence has increased for several months, moving back into positive territory. I’m changing the signal back to green primarily based on the multi-month improvement rather than this month’s data, as the tick above zero is largely due to a weak result last July.
All in all, however, consumer confidence remains at healthy levels, and the decline in the growth rate has apparently been arrested and even converted into a positive trend.
Conclusion: Economy healthy, negative trends continue to reverse
The continued improvements in multiple metrics suggest that the negative trends of the past couple of months are reversing. This makes sense, as we’ve seen pullbacks like this before in the recovery, and the reversal of the most recent one would simply be in line with previous experience. It’s also consistent with improvements in many other areas of the economy that we don’t track here.
We certainly need to watch how things evolve, but given the generally healthy levels of the most recent data and the increasing likelihood that trends are turning favorable, the overall signal for the economy remains a green light.
Brad McMillan is the chief investment officer at Commonwealth Financial Network, the nation’s largest privately held independent broker/dealer-RIA. He is the primary spokesperson for Commonwealth’s investment divisions. This post originally appeared on The Independent Market Observer, a daily blog authored by McMillan.