The current conditions component moved above 50 for the first time since last August, adding 7 points to last month’s mark to reach 53.3 in January. The responses presented a much more straightforward view than in recent months as the share of respondents that noted better conditions increased compared to last month, and the proportion of those who reported unchanged or worse conditions declined. Although some comments alluded to unease because of trade policy and the partial federal government shutdown, one respondent described a solid start to the year.
Edging back to positive following a three-month stretch of negative results, the mean value of the reported intensity of change in electroindustry business conditions came in at +0.1 in January. The median value held steady at 0 for the second straight month after briefly visiting negative territory late last year. Panelists are asked to report intensity of change on a scale ranging from –5 (deteriorated significantly) through 0 (unchanged) to +5 (improved significantly).
In contrast with current conditions, the future conditions component slid further below 50, hitting the lowest level since near the end of the last recession. Losing 9.5 points from December, the six-month-ahead measure of electroindustry business confidence came in at 36.7 this month. It is important to note that all responses were collected prior to the announcement of a temporary funding measure that re-opened shuttered agencies and before Chairman Powell announced that the Federal Reserve is likely to hold steady on interest rates. Much of the commentary focused on the uncertainty caused by evident federal government dysfunction. One commenter noted expected weakness in the economy, particularly the construction sector.
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