Friday, June 19, 2009

Consumer Confidence on the Rise

Consumer confidence recently saw its most dramatic rise in eight months, showing Americans are regaining their confidence in the U.S. economy. According to the Conference Board Consumer Confidence Index, which had improved considerably in April, May saw an even larger increase. The Index now stands at 54.9, up from 40.8 in April. May’s level is the highest since last September’s level of 61.4

According to Lynn Franco, Director of The Confidence Board Consumer Research Center, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months. The survey also reported that there was a rise of 23.1 percent in consumers who are expecting business conditions will improve over the next six months.

While confidence is still weak by historical standards, it seems that as far as consumers are concerned, the worst is now behind us. According to a Bloomberg article, the gains in stock prices, consumer confidence and residential and commercial building permits that are propelling the leading index higher bolster forecasts that the economy will start growing again in the second half of 2009.

This increase could mean even more positive news for the real estate market, with housing starts soaring 17 percent, as construction of single-family homes gained for the third straight month. The economy shows signs of recovery and this trend is clearly expected to continue.

No comments: