Until this month, business conditions have held steady. Now we may see the tide turning. Very much so. This component is a key factor of spending patterns. That's important, since consumers account for two-thirds of all economic activity and we are in a period of slow economic growth.
Jobs are far more crucial than the stock market, since they are the prime source of income.
When consumers begin to worry about their jobs and incomes, they close their wallets. That's why confidence readings have such an impact on so many businesses. Consumers often anticipate Fed actions and have already taken Fed moves into account when voicing their opinions. This latest cut, however, may be sending mixed signals to consumers, causing them to worry that conditions may be worse than they are. I'd keep my eyes focused on the Present Situation Index.