In August, the consumer confidence index metric gauge went up a couple of bumps for the Conference Board’s monthly report. The simple gain gave the stock market a jolt into positive territory Tuesday morning.
Consumer confidence index beats forecast
August predictions showed consumer confidence less than it was. Bloomberg reports that the increase within the consumer confidence report to 53.5 from a five-month low of 51 in July could be a sign the biggest part of the economic system may keep away from a further slide that could effectively end a stalled economical recovery. The increase didn’t necessarily mean anything, an economist said to Bloomberg. It was at a “stunningly low level” in August. Even so, higher confidence brings a ray of hope that consumer spending — 70 percent of the United States of America economy — will recover. Businesses should start hiring more soon. The Labor Department shows that only 51,000 jobs were created between May and July. This is down 200,000 from the two months before that.
Consumer confidence report info
In addition to the consumer confidence index, the Conference Board report contains other information. Consumers know the economy is bad right now however hope the future is far better, says MarketWatch. There was a drop in the Conference Board’s present-situation index from 26.4 in July to 24.9 in August, which shows the opportunities and business climate and people’s attitudes toward it. There is also the expectations index showing where the community expects the business climate and job creation to go which went up from 67.5 in July to 72.5 in August. 1.9 percent to 2 percent was how the consumers planning to buy a home moved. Before, only 4.7 percent prepared to purchase a vehicle. Now, you will find 5 percent of people preparing a car. An economist told MarketWatch that despite the August gains, consumer confidence is at “incredibly depressed levels,” compared with previous economical recoveries.
Increase in index doesn’t mean consumer spending
To know your economic system is healthy, you need to have a consumer confidence over 90. This was explained by the Associated Press. The change in August still created other change. This change was in the currency markets, of course. Every point falling on the New York Stock Exchange meant two stocks rose. Like all recent market rallies, this one is expected to be short-lived. Most economic reports show economic growth is slowing, and also the slight uptick in consumer confidence doesn’t guarantee an increase in consumer spending. A high unemployment rate continues to motivate consumer saving and debt reduction — behavior considered virtuous from a personal finance standpoint. But until the job market recovers and people open their wallets, the late-summer slump could continue for the rest of the year and drag the United States overall economy into a double-dip recession.
Discover more details on this subject
Bloomberg
bloomberg.com/news/2010-08-31/consumer-confidence-in-u-s-rose-more-than-economists-forecast-in-august.html
MarketWatch
marketwatch.com/story/august-consumer-confidence-rises-to-535-2010-08-31-102600
Associated Press
google.com/hostednews/ap/article/ALeqM5jmT59dgLTTziX4p9X9MRBRpWZGdQD9HUH2I80
