Consumer Confidence May Drop Due to Wall Street Roller Coaster
Posted October 1, 1998
RALEIGH — The Dow is hitting record highs and lows. Global markets are crumbling, and interest rates have been cut.
In the last month, hundreds of people in the Triangle has lost high-paying jobs. Yet, the mood remainscautiouslyoptimistic.
Consumer confidence is measured in national surveys where people are asked about their future financial prospects. The surveys indicate confidence has dropped three straight months, after record highs.
The surveys are an important national indicator, but what about consumer confidence in the Triangle? Both businesses and charities are beginning to look over their shoulders.
New homes, new cars and more. The Triangle's big spending spree has gone on for years, but for the first time in a long while, there are signs consumer confidence may drop.
Volatile financial markets have shaken our seniors, many of whom depend on their investments as a source of income.
"Clients need reassurance now more than they have in the past, and I believe it's because the volatility has been compressed into a very short period of time," said Bill Babb, a certified financial planner. "We're seeing wild swings in the market day to day, and that makes people uneasy with their money."
The Triangle has also seen a lot of layoffs in recent weeks. And while banks are still doing a lot of lending, they're getting more particular about who gets their loans.
"The signs that you're seeing may be a little bit of an adjustment back from a pretty loose standard that the industry has been moving towards," said Capital Bank President and CEO Jim Beck.
Barometers like charitable giving indicate we haven't tightened our belts yet. The Triangle United Way says its funding is on pace with last year, though it wonders what lies ahead.
"You know there's a little bit of concern, but I wouldn't say it's a significant amount of concern, because we see the positive work that's going on," said Bill Peck of theTriangle United Way.
And what about the retail end of business? Jim Smith, a well-known economist at UNC's business school, says he'll be stunned beyond belief if this isn't a record holiday shopping season in the Triangle.
Meanwhile, Ken Gassman, a reknowned retail analyst, says he's tentatively predicting Triangle retailers will see strong sales, just not as robust as last year.