Sunday, September 5, 2010
Consumer's mood improves but outlook is gloomy
The focus of this article was on the recent Consumer Confidence Report, which measures how consumers feel about business conditions, the job market, and the next six months. In a healthy economy, the Consumer Confidence index is above 90%. The USA CCI raised from 51% in July to 53% in August. Although the numbers may look like the USA is coming out of the recession, the reason for the increase is mostly a result of consumers confidence in the next 6 months. The consumers confidence for the next six months is 72% while the confidence in the current economy is still at a measly 26%. I just wonder if this feeling of assurance in our economy could cause complacency.
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I'm not entirely sure there is a level of assurance felt by the general population, especially with confidence in job opportunities declining and the levels of saving staying stagnant.
ReplyDeleteThe general panic of the recession has started to pass as firms are calmer about hiring and layoffs and consumers are beginning to feel more confident about the economy. If the consumer confidence is able to stimulate investment in the economy (also through a growth in consumer spending), although a long-term process, there is a higher chance of a growth in employment opportunities. On a brighter note regarding the recession, the number of people layed-off returned to school for further education. This could lead to an increase in innovation and entrepreneurship in a few years, thus automatically increasing job opportunities while stimulating the economy at the same time. This could also mean a stronger, more skilled workforce returning to the economy, increasing productivity. So, although the unemployment situation is unfortunate and frustrating, there is hope the consumer confidence will be contagious enough to inspire investors and kickoff the revitalize the economic cycle.
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