This article discusses the signs that seem to indicate a turnaround in the US economy. One of the main focuses of the article was the impacts of the revolution in Libya and it's affect on U.S. consumers. The article points out that the oil price turmoil that has lead to a 6 cent spike in oil prices hasn't seemed to upset U.S. consumers like it would have been expected to. In previous years it was extremely big news when oil prices were fluctuating so much, but the article is saying that consumer sentiment is up 3.3% since January despite the prices, showing that consumers aren't in such a tight monetary situation
2 comments:
The fact that consumers are not very phased by the rise in oil prices is a good sign of consumer confidence. Consumer sentiment is positive which is also a very good sign. In addition, some economists, such as those at JPMorgan, have quite high forecasts for first-quarter GDP growth. In this specific example, they did lower their forecast to a GDP growth rate of 3.5% from 4.0%. This drop was attributed to the rise in oil prices but a 3.5% GDP growth rate would still be good.
There may be a time lag between the increase in oil price and consumers' actual reaction to this. I would like to believe the optimistic view of the author but I'd say wait and see the forecast for the second-quarter GDP growth and the consumer sentiment at that time. I doubt the rise in oil price will still keep consumer sentiment positive.
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