Trans4Cast – Confidence Surge!

By | April 11, 2017

Consumer Confidence Index - NFIB OptimismConsumer confidence as reported by the Conference Board has jumped to its highest level since December 2000. Business confidence (coming from the NFIB Small Business Optimism Index) has likewise jumped to its highest level since December 2004 and is in the high range seen during its 43 year history.

Positive, Perplexing, and Worrisome Confidence

A couple of weeks ago I tweeted out the following:

“The big gains in confidence indices is quite positive, somewhat 
perplexing, and a little worrisome. Can they really be all 3 things at once?” - @JonStarksFTR

I want to delve into this a little bit further.


Multi-month surges in the consumer confidence index typically lead to, at minimum, several quarters of economic expansion. That would indicate that we are looking at a solid year for 2017 and potentially into 2018 before needing to worry about a full-blown recession. That is right in line with the current FTR outlook.


In a brief review of the business confidence data, this looks to be the quickest that the NFIB Small Business Optimism index has risen this much since at least the early 1980s. However, trying to correlate that to overall economic activity is tougher to accomplish. The NFIB index did decline significantly during the Great Recession, but it had already been declining for a full 2 years prior to that. During the recession at the beginning of the Oughts, The NFIB index barely budged, dropping modestly just before the recession and rebounding back to its previously levels as soon as it was over (which was also the 9/11 timeframe). Is this a Trump Effect? It’s hard to say, but seems quite likely. The index typically doesn’t move too much based on electoral results but the sudden and dramatic shift in the numbers is hard to describe without some attribution to the election results.

Why Worry?

So things seem positive, if somewhat perplexing. Why the worry? Any time you see such sudden and dramatic shifts it causes you to scratch your head and try to make sense of the change. In looking at the ‘hard’ economic data that has come out since the election, the markets are subtly shifting to the positive, but nowhere near the levels indicated by the recent confidence indices. Until we can see a clearer pattern I remain skeptical that such results will bear out.

Stay tuned!

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About Jonathan Starks

Jonathan has spent his entire career in the freight transportation sector having joined FTR in 2001. His expertise includes freight modeling, modal analysis, fleet characteristics, and equipment demand. He is directly responsible for producing FTR's more than 13 million datapoints and 85,000 forecasted dataseries each and every month.