Bank stress shakes sentiment but labour markets an anchor

Concerns are growing that tightening financial conditions will push the US economy into recession and affect other G7 economies as well, according to our proprietary sentiment data.

What you will learn:

• Since the onset of turmoil in the banking sector, our data shows sentiment around the prospects for the economy has deteriorated sharply, though from an already low starting point.
• The good news is that, so far, strong labour markets are helping to limit pass-through to broader consumer confidence, which is acting as a circuit breaker on a potentially damaging self-reinforcing cycle. The longer the situation persists, however, the greater the risk that firms will reassess their investment and hiring needs.