Stock investors are buoying the economy. A labor market breakdown could end that

As stock market investors support economic sentiment, some economists wonder if a looser labor market could pull the rug out.

The University of Michigan’s widely-followed consumer sentiment index slid more than 6% in November, nearing all-time lows and down about 30% from a year ago. Respondents were concerned that the long-running federal government shutdown would drag on the economy, according to survey director Joanne Hsu.

But at least one group bucked the sour mood: Those with the most stock holdings.

The individuals with sizable stock market wealth reported an 11% improvement in sentiment, which Hsu tied to the stock market’s recent rally to all-time highs.

Conventional wisdom is that wealthier consumers will keep spending as long as they feel good about their own circumstances and see their investments growing, bolstering the economy and corporate profits. But now other economists are concerned that federal labor data, once it resumes, may paint a darker picture of the economy and catalyze a market sell-off that would throw cold water on rosy outlooks.