In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the latest in consumer confidence.
- Americans are less pessimistic than before, but not yet optimistic. The latest consumer confidence index rose to 80.7 in January from 77 in December and 72 in November. However, it has yet to reach the 100 line, the point at which it is considered neutral. For comparison, the index was in the 110s during the second-term of Ronald Reagan Presidency and in the 130s during the second term of Bill Clinton’s Presidency.
- The trend, however, is a steady improvement. At the depths of the economic downturn, the index was touching a record low of 25. Further steady improvements in the job market will continue to lift confidence, which in turn can lift people to make major expenditures including home purchases.
- Changing the mood of the country can have a measurable impact on the country while costing not a dime of taxpayers’ money. But getting a speech right or projecting power is never an easy task from the country’s leadership persepctive.
- Back during the 1930s Great Depression, FDR wanted to try everything possible to lift the spirit of the folks. He even hid his physical handicap in order to show health and strength, though being in a wheelchair would be considered a less consequential matter in today’s world. Winston Churchill also had huge confidence in America at that time just as the stock market was tanking big time (1932), saying in essence that U.S. will continue to go on living with a strong resurgence even if the rest of the world sank into sea (as he watched the menacing growth of Nazism in Germany and terror in Stalin-ruled Soviet Union). Churchill put his money where his mouth was – in the U.S. stock market – and wound up making a hefty return. Confidence matters.