Economy Watch: Slow But Steady Recovery in Consumer Confidence
- Aug 15, 2016
Despite recent uncertainty about the state of the U.S. economy and an upcoming election unlike any in recent memory, U.S. consumers still seem to have a reasonable amount of confidence in the economy, representing a slow but steady recovery from the recession. If so, that’s good news for retailers, especially as they ramp up toward the holiday sales season. Overall retail sales didn’t move in July, but they were up considerably in the months before that.
On Friday, the University of Michigan reported that consumer confidence inched upward in early August–90.4 compared with 90.0 in July–due to more favorable prospects for the overall economy, offsetting a small pullback in personal finances. Most of the weakness in personal finances was among younger households, who cited higher expenses than anticipated, as well as somewhat smaller expected income gains, noted Surveys of Consumers Chief Economist Richard Curtin.
“Concerns about Brexit have faded amid rising references to the outcome of the presidential election as a source of uncertainty about future economic prospects,” said Curtin. Overall, he added, the data remains consistent with real personal consumption expenditures improving at an annual rate of 2.6 percent through mid-2017.
Separately, the Pew Research Center reported last week that Americans are slowly but consistently regaining confidence in the economy. Only 44 percent of Americans currently think the U.S. economic situation is good, according to Pew, but that’s a full 27 percentage points higher than in 2009. Economic confidence remains lower than the pre-crisis 50 percent registered in 2007, however.