Consumer Confidence Zooms/Jobless Claims Dip/Deficit Drops 14%
WASHINGTON - Consumer confidence zoomed to a seven-month high as lower gasoline prices made people feel a lot better about the current economic climate and their own financial standing.
The RBC Cash Index, based on the results of the international polling firm Ipsos, showed confidence rebounding to 93.7 in early September.
That marked an improvement from August, when consumer confidence sank to a three-month low of 74.8. At that time, the toll of soaring energy prices was blamed for weighing on consumers' psyches. The recent drop in energy prices, however, provided people with some relief and propelled confidence to its best reading since February.
"The drop in pump prices is very visible to consumers and seems to have a huge impact," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group. "Consumers seem to view gasoline prices as a barometer to their overall well being."
After surging past $3 a gallon in many areas, gasoline prices are now hovering around $2.62 a gallon nationwide, the Energy Department says.
Economists believe that price relief figured prominently in the upswing in consumers' feelings about current economic conditions. This measure shot up to 118.8 in early September. That was up sharply from 92.1 in August and was the highest reading on record. Ipsos started the confidence index in 2002.
The drop in other energy prices also is good news for consumers and businesses alike, analysts said.
Oil prices, which surged to a record closing high of $77.03 a barrel in mid-July, have since eased and are now above $63 a barrel. Natural gas prices, meanwhile, fell to a two-year low on Thursday, raising hopes that homeowners who depend on gas to heat their homes will see lower bills this winter.
Consumers' sentiments about making a purchase, saving and other investment decisions also improved considerably in September.
This investment measure jumped to 110 in September, up from 83.2 in August. It was the second-best showing on record, trailing only a reading of 111.7 in late January 2002, when the economy was in recovery mode after the 2001 recession.
Analysts mostly attributed the pickup in September's investment measure to receding mortgage rates. Rates on 30-year mortgages fell this week to 6.43 percent, the lowest since early April, according to Freddie Mac.
Analysts also believe the Federal Reserve's decision in early August to halt a rate-raising campaign that began more than two years ago probably played a role in the improvement in the investment index. Many economists predict the central bank will leave rates alone again when they meet next week.
That will give borrowers breathing room, said Richard Yamarone, economist at Argus Research.
Analysts track consumer confidence for clues about consumers' willingness to spend, an important factor shaping economic activity. Economists were hopeful that the retreat in energy prices will leave people with more money in their wallets that they will spend on other things.
"The consumer is not going to get hit as hard as some people had feared," said T.J. Marta, a fixed-income strategist with RBC.
Consumers' feelings about future economic conditions rose to 39.4 in September from 21.8 in August.
The confidence index is benchmarked to a reading of 100 on January 2002, when Ipsos started the gauge.
A gauge measuring consumers' sentiments about jobs clocked in at 119.4 in September, down slightly from 120.5 in August. Hiring picked up in August, pulling the unemployment rate down to 4.7 percent.
Consumer Confidence Skyrockets
US Jobless Claims Dip
Deficit Drops 14%
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WOW! This economy is kicking butt!
The RBC Cash Index, based on the results of the international polling firm Ipsos, showed confidence rebounding to 93.7 in early September.
That marked an improvement from August, when consumer confidence sank to a three-month low of 74.8. At that time, the toll of soaring energy prices was blamed for weighing on consumers' psyches. The recent drop in energy prices, however, provided people with some relief and propelled confidence to its best reading since February.
"The drop in pump prices is very visible to consumers and seems to have a huge impact," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group. "Consumers seem to view gasoline prices as a barometer to their overall well being."
After surging past $3 a gallon in many areas, gasoline prices are now hovering around $2.62 a gallon nationwide, the Energy Department says.
Economists believe that price relief figured prominently in the upswing in consumers' feelings about current economic conditions. This measure shot up to 118.8 in early September. That was up sharply from 92.1 in August and was the highest reading on record. Ipsos started the confidence index in 2002.
The drop in other energy prices also is good news for consumers and businesses alike, analysts said.
Oil prices, which surged to a record closing high of $77.03 a barrel in mid-July, have since eased and are now above $63 a barrel. Natural gas prices, meanwhile, fell to a two-year low on Thursday, raising hopes that homeowners who depend on gas to heat their homes will see lower bills this winter.
Consumers' sentiments about making a purchase, saving and other investment decisions also improved considerably in September.
This investment measure jumped to 110 in September, up from 83.2 in August. It was the second-best showing on record, trailing only a reading of 111.7 in late January 2002, when the economy was in recovery mode after the 2001 recession.
Analysts mostly attributed the pickup in September's investment measure to receding mortgage rates. Rates on 30-year mortgages fell this week to 6.43 percent, the lowest since early April, according to Freddie Mac.
Analysts also believe the Federal Reserve's decision in early August to halt a rate-raising campaign that began more than two years ago probably played a role in the improvement in the investment index. Many economists predict the central bank will leave rates alone again when they meet next week.
That will give borrowers breathing room, said Richard Yamarone, economist at Argus Research.
Analysts track consumer confidence for clues about consumers' willingness to spend, an important factor shaping economic activity. Economists were hopeful that the retreat in energy prices will leave people with more money in their wallets that they will spend on other things.
"The consumer is not going to get hit as hard as some people had feared," said T.J. Marta, a fixed-income strategist with RBC.
Consumers' feelings about future economic conditions rose to 39.4 in September from 21.8 in August.
The confidence index is benchmarked to a reading of 100 on January 2002, when Ipsos started the gauge.
A gauge measuring consumers' sentiments about jobs clocked in at 119.4 in September, down slightly from 120.5 in August. Hiring picked up in August, pulling the unemployment rate down to 4.7 percent.
Consumer Confidence Skyrockets
US Jobless Claims Dip
Deficit Drops 14%
~~~~~~~~~~~~~~~~~~~~~~
WOW! This economy is kicking butt!
posted by Marie's Two Cents | 5:01 PM
10 Comments:
The test comes after the election. I don't believe we are out of the woods 100% economywise, but I believe in time it may. The deficit has dropped, but 14% is a fairly small percentage, although every little bit helps. The national debt has risen since. That is another concern.
Yeah, yeah..."Economy booming--Women, minorities hardest hit"
The Economy is in better shape than it was three years ago. I am getting conflicting stories about consumer indexes. One source said it was falling and the other source said it rose slightly. My theory on it that consumer confindence is rising because of falling oil prices. So that is a big sign of optimism.
Penn,
The test comes after the election. I don't believe we are out of the woods 100% economywise, but I believe in time it may. The deficit has dropped, but 14% is a fairly small percentage, although every little bit helps. The national debt has risen since. That is another concern.
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After the election? This economy has been steadily recovering from 9-11 ever since, and it's been on a roll.
Uncle P,
Yeah, yeah..."Economy booming--Women, minorities hardest hit"
LOL, what are you talking about?
Penn,
The Economy is in better shape than it was three years ago. I am getting conflicting stories about consumer indexes. One source said it was falling and the other source said it rose slightly. My theory on it that consumer confindence is rising because of falling oil prices. So that is a big sign of optimism.
~~~~~~~~~~~~~~~~~~
Well yeah, Gas prices falling have had alot to do with it. Have you noticed the tirade the Liberals went on when Gas prices went sky high this summer? If they wouldnt have been trying to pull some political stunt, any of us could have told them "It happenes EVERY summer dufuss" lol.
Where are the investigations now?
I swear they will pull anything during election season.
If any of us intend to vote Republican this year (DUH), watch your tires!!!!
Marie, I thought the Democrates asking for an investigation into the oil companies was a riot, How many of these Democrates have money invested in oil compnies? I would guess it is almost all of them.
Angry,
Marie, I thought the Democrates asking for an investigation into the oil companies was a riot, How many of these Democrates have money invested in oil compnies? I would guess it is almost all of them.
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Yeah, where are all those investigations now? lol
Oh I bet the same thing, probably ALL the Democrats have oil investments.
They just like to whine, bitch and moan, and do anything to get control back.
Well, Marie, the story goes that God finally gets fed up with humanity and decides to end the world (I know the theology is suspect, but bear with me.) He calls three newspapers with the news, the Wall Street Journal, the New York Times, and the Washington Post. The next morning, the headlines read:
"World Ends Tomorrow-Markets to close early"-Wall Street Journal
"World Ends Tomorrow-Details on Page A6"-New York Times
"World Ends Tomorrow-Women, minorities hardest hit"-Washington Post
The point is, to a liberal, behind every silver lining, there's a big, dark cloud. At least while George W. Bush is in the White House.
Happy motoring...
Uncle P,
Well, Marie, the story goes that God finally gets fed up with humanity and decides to end the world (I know the theology is suspect, but bear with me.) He calls three newspapers with the news, the Wall Street Journal, the New York Times, and the Washington Post. The next morning, the headlines read:
"World Ends Tomorrow-Markets to close early"-Wall Street Journal
"World Ends Tomorrow-Details on Page A6"-New York Times
"World Ends Tomorrow-Women, minorities hardest hit"-Washington Post
The point is, to a liberal, behind every silver lining, there's a big, dark cloud. At least while George W. Bush is in the White House.
Happy motoring...
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Haha I was beginning to wonder, every time I post about the economy, you post that and I was thinking "What is he talking about"? lol
The Liberals need to get over the fact Bush is our President no matter what they want!
I know we are completely off topic here but, we are electing Congress this year, and Bush isnt running again!
Dark Cloud Indeed!
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