Consumer confidence in economy reaches all-time high
Thursday, June 07, 2012
The results of a new report on consumer sentiment and confidence reveals that Americans are adopting a "wait and see" attitude that could be attributed to slowing job growth and flattening macro trends.
The May 2012 National Housing Survey from Fannie Mae revealed that the modest positive trends shown in consumer attitudes since the beginning of fall 2011 have reached a plateau and that recent attitudes are reflecting overall macroeconomic indicators, including employment opportunities and income growth.
"Our May consumer data show that Americans are taking a 'wait and see' approach about buying or selling a home," said Doug Duncan, vice president and chief economist at Fannie Mae. "This is not surprising given their assessment that their income during the past twelve months and their personal financial expectation for the next twelve have leveled off. These data are in line with what we are seeing on the macroeconomic front, as upside and downside risks and activities are moderating one another."
When it comes to the economy and household finances, the survey found that consumer belief that the economy is on the right track reached an all-time high of 38 percent this month. In addition, 46 percent of respondents said they expect their personal finances to stay the same over the next year, which is a 2 percent boost from last month.
"Current jobs data are reminiscent of the spring slowdown that continued into the summer months during the last two years," Duncan added. "If this pattern continues, we do not expect to see any significant upturn in consumer sentiment during the summer and a meaningful housing recovery likely will be delayed once again."
Also, 15 percent of respondents said their household income is significantly lower than it was a year ago, which is a record low.
Adding to the upbeat sentiment among most consumers, Warren Buffett, the billionaire and CEO of investment firm Berkshire Hathaway, recently announced at a June 5 gathering of economists in Washington that he does not see the United States falling into another recession.
Investors should know how various economic factors can influence their investment strategies and can also use discount brokers for their various needs.
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