Consumer confidence bump a ray of hope in bleak economic outlook

The Conference Board’s monthly report on its consumer confidence index showed the metric utilized to gauge monetary view really bumped up a handful of points in August. This is the reason the stock exchange went up Tuesday.

Consumer confidence better than before

August reports show consumer confidence levels increasing. This was not expected. Bloomberg reports that the increase in the consumer confidence report to 53.5 from a five-month low of 51 in July could possibly be a sign the biggest part of the economy may stay away from a further slide that could effectively end a stalled economical recovery. But even with the increase, an economist told Bloomberg the August consumer confidence figure is at a “stunningly low level.”. Consumer spending is 70 percent of the United States of America overall economy and may recover with the small bit of hope from the higher confidence. Corporations should start hiring more soon. Yet according to the Labor Department, businesses created an average of 51,000 jobs from May through July — down from 200,000 the previous two months.

Details about the consumer confidence report

There were other details given by the Conference Board besides the consumer confidence index. Consumers know the economy is bad right now but hope the future is much 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. The report also shows what the expectations for a better business climate and more jobs creation are, which is called the expectation index. It actually went up from July to August from 67.5 to 72.5. 1.9 percent to 2 percent was how the consumers preparing to buy a home moved. People preparing to buy a car rose to 5 percent from 4.7 percent. And economist talked to MarketWatch. He explained that even though there may are an increase in the consumer confidence levels, it is still at “incredibly depressed levels.”.

Increase in index doesn’t mean consumer spending will automatically happen

The Associated Press explains that a healthy economy usually runs under a consumer confidence index over 90. Tuesday morning, there was still a change within the stock exchange due to the August bump. About two stocks rose for each and every one that fell on the New York Stock Exchange. Like all recent market rallies, this one is expected to be short-lived. The economy is growing slowly, shows most economical reports. There may not be consumer spending just because consumer confidence has gone up. Personal finance shows that it is great that unemployment is moving more individuals to save and reduce debt. 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.

Additional reading

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