In August, the consumer confidence index metric gauge went up a couple bumps for the Conference Board’s monthly report. This made a difference stock market Tuesday. The stock exchange really went up.
More of a consumer confidence that expected
Consumer confidence rose in August to beat predictions. Bloomberg showed that a five month low of 51 points within the consumer confidence report was shown in July while in August it went up to 53.5. This shows that the economy may really be getting much better instead of going down as every person expected. But besides the increase, an economist told Bloomberg the August consumer confidence figure is at a “stunningly low level.”. Still, there is a higher confidence. This higher confidence may lead to a recovery of consumer spending, 70 percent of the United States economy. Soon, there may be more hiring. Businesses need to do this. From May to July, 51,000 jobs were created, which is down from 200,000 the last two months, reports the Labor Department.
Consumer Confidence report
The consumer confidence index was not the only thing the conference Board report gave. There were also a lot of other details given. Consumers know the economy is bad right now but hope the future is improved, 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 expectations index — a measure of expectations for a better business climate and more job creation — rose to 72.5 in August from 67.5 in July. 1.9 percent to 2 percent was how the consumers planning to buy a home moved. People planning to purchase a car rose to 5 percent from 4.7 percent. An economist told MarketWatch that despite the August gains, consumer confidence is at “incredibly depressed levels,” in contrast to previous recoveries.
Consumer spending may not happen with index increase
The Associated Press explains that a healthy economy usually runs under a consumer confidence report over 90. Tuesday morning, there was still a change within the stock exchange because of the August bump. About two stocks rose for each and every one that fell on the New York Stock Exchange. This is not going to happen for too long. It is too good to be true. Most economic reports show economic growth is slowing, and also the slight uptick in consumer confidence doesn’t guarantee an increase in consumer spending. Personal finance shows that it is great that joblessness is moving more individuals to conserve 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 economic system 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
