NEW YORK (AP) -- Americans are feeling more chipper about the economy than they have in three years.
The Consumer Confidence Index rose to 70.4 this month, up from 64.8 in January, as Americans expressed more optimism about their income prospects and the direction the economy is headed, a private research group reported Tuesday.
It's the strongest reading since the early days of the most severe recession the U.S. has seen since the 1930s.
A robust stock market and falling unemployment are lifting Americans' spirits in spite of rising food and energy prices and a still-weak housing sector. In addition, a cut to the Social Security tax meant Americans started seeing more money in their paychecks in January, which may be boosting consumer spending.
Retailers including Macy's Inc., Home Depot Inc. and VF Corp., maker of Lee jeans and Vans shoes, reported better-than-expected earnings Tuesday. Home Depot posted its first annual revenue increase since before the housing crash in 2006, while Macy's, the country's second-largest department store chain, saw sales at stores open at least a year climb 4.3 percent...
This is good news, the consumer confidence is gradually increasing since November. This may mean that the U.S. economy is getting stronger as well despite the global news regarding the Middle East. My concern is that increasing oil prices would have impact on the imports and the prices may increase, resulting in a decrease of consumer confidence.
4 comments:
It looks as though the monetary and fiscal tools set in place by the Fed and the government may be finally working their magic. The key component of lifting an economy out of recession is getting consumers to spend. As consumer confidence grows the American economy should slowly grow stronger. Hopefully, investment follows and small businesses begin to look for funds to expand, that would only help the cause.
The increase in oil price is mainly due to outside factors, therefore, it shouldn't have that much of an impact on consumers' confidence on US economy. Consumers' expectations of the future will lead the economy towards that direction, it's a self-fulfilling prophecy, so it's great that the consumers see the US economy getting stronger and the economy will move towards that direction.
Check out this podcast from econtalks.org (the same site that we've had to listen to for homework). They debate whether the stimulus package has worked (and give background, Keynesian theory etc.).
This is great news that the consumer confidence is rising. Our economy is finally getting stronger and moving forward. As confidence increases GDP increases, more money is being put into the system and through circulation, and people spend more instead of save. All over the U.S. gasoline prices are increasing. I do not necessarily think a slight increase in gas prices will affect the CC, but its definitely a negative factor during our time of steady growth.
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