Business

Is it a real rise in consumer confidence?
by Lenka Filipova

University of Michigan consumer confidence stated result of 80.5 for January 2008. A little rise is noticed when to compare result of 75.5 with the end of the year 2007. The confidence reached its bottom in October 2005, just after Hurricane Katrina. The previously mentioned slight reversal might be a result of the announcements about the tax cuts proclaimed by the White House as well as decreasing the interest rate reported by U.S. Federal Reserve. Despite the fact that the consumer's sentiment has changed to positive direction at the beginning of the year, there still exist doubts about economic come-down. The improvement goes against worsening economic conditions which are result of several market stock losses, weakening residential real estate, and lowering gasoline prices. According to Ian Shepherdson, chief U.S. economist with High Frequency Economics in Valhalla, "Stock prices are a key leading indicator of sentiment, and the latest declines will hit the data next month." Additionally, ongoing increase in consumer loan rates and mortgages rate will certainly decrease overall consumer spending, which makes up approximately 70 percent of U.S. Gross domestic product. However, on one side, recent report of the confidence assessment of current conditions was 98.1, up from 91.0. On the other side, the consumers still feel doubt about their finances because their mailboxes are just over flooded with brokerage and retirement savings accounts. Thus, there is necessity to treat the improvement of customer confidence carefully.

by Lenka Filipova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

posted by Blog TechSource @ 12:57 PM