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US Consumer Confidence Rises Higher

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US Consumer Confidence Rises Higher

The key monthly Reuters / Michigan Consumer Sentiment Index has come in at 82.6 against a previous months reading of 80 and a consensus estimate of 81.0, these is a preliminary reading and will be revised later next week.

This statistic compiled jointly by Reuters and the University of Michigan reflects consumer confidence in the US economy. It is largely interpreted as a willingness of consumers to spend their money and therefore serves as a vital indicator of the strength of domestic demand.

The fragile early stages of the US recovery are beginning to solidify as the overly harsh winter season passes and the positive data readings become more and more consistent.

Yesterday’s Initial Jobless Claims figures were at their lowest level in almost seven years as the US begins to move away from the ‘jobless recovery’ title that framed the early days of this return to growth.

Despite the consistently improving Jobless Claims numbers however the Unemployment rate remains stubbornly stuck around the 6.7% level. The interpretation of this is that individuals, that had previously withdrawn from the workforce due to lack of opportunities, are now returning in large numbers. This is bad for the data but good for the economy.

The Federal Reserve has recently openly acknowledged that the employment situation is not quite what it seems on the surface. In a similar manner to other recovering developed economies, there are significant regional disparities in the rate of jobs growth across the nation. The Fed have decided to monitor this phenomena but actively addressing it is beyond their remit. Additionally the Fed are concerned by the number of part time roles that are influencing the data, again there is not a significant amount that the Federal Reserve can do to in this situation in order to directly affect this. Remaining ‘accommodative’ and hoping that governmental authorities can address these structural employment issues is really all the Fed can do at this juncture.

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