US economy fears as consumer confidence plunges
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Pastor Dale Morgan
Sep 17, 2010, 8:56:05 PM9/17/10
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Perilous Times
US economy fears as consumer confidence plunges
American consumers do not expect to be feeling any more confident in six months' time, a widely-watched index revealed today, underlining the hurdles facing a recovery in the world's biggest economy.
Richard Blackden, US Business Editor
Published: 8:44PM BST 17 Sep 2010
Evidence of a flagging consumer will worry the Federal Reserve, which meets next week to decide on what, if any, further stimulus measures the economy needs.
The Thomson Reuters/University of Michigan index of consumers' future confidence fell this month to the lowest level since March 2009, when the shadow of the financial crisis hung heavily over the whole economy. Current confidence was little better, with the index dropping to 66.6 in September from 68.9 in August.
After an almost relentless stream of weak data over the summer, investors and analysts are desperately trying to gauge on the most likely path for the economy. While billionaire investor Warren Buffett has ruled out a double-dip recession, others are less sanguine.
Paul Dales of Capital Economics said that although he expects consumption to have held up this quarter, it is unlikely to be enough to give companies the confidence to start hiring. The weeks before Thanksgiving in late November – a major holiday in the US – will prove a critical test for consumers and the companies that rely on them.
Best Buy, the world's biggest consumer electronics company, and delivery company FedEx said this week that the indications are that spending should hold up.
Evidence of a flagging consumer will worry the Federal Reserve, which meets next week to decide on what, if any, further stimulus measures the economy needs.
Separate data released yesterday showed that Fed chairman Ben Bernanke has little to worry about on inflation. Underlying inflation, which strips out food and energy costs, was flat at 0.1pc in August. Analysts at Commerzbank commented that "US economy seems to be too weak too generate meaningful inflationary pressure but also too strong for a fall into deflation."
US economy fears as consumer confidence plunges
American consumers do not expect to be feeling any more confident in six months' time, a widely-watched index revealed today, underlining the hurdles facing a recovery in the world's biggest economy.
Richard Blackden, US Business Editor
Published: 8:44PM BST 17 Sep 2010
Evidence of a flagging consumer will worry the Federal Reserve, which meets next week to decide on what, if any, further stimulus measures the economy needs.
The Thomson Reuters/University of Michigan index of consumers' future confidence fell this month to the lowest level since March 2009, when the shadow of the financial crisis hung heavily over the whole economy. Current confidence was little better, with the index dropping to 66.6 in September from 68.9 in August.
After an almost relentless stream of weak data over the summer, investors and analysts are desperately trying to gauge on the most likely path for the economy. While billionaire investor Warren Buffett has ruled out a double-dip recession, others are less sanguine.
Paul Dales of Capital Economics said that although he expects consumption to have held up this quarter, it is unlikely to be enough to give companies the confidence to start hiring. The weeks before Thanksgiving in late November – a major holiday in the US – will prove a critical test for consumers and the companies that rely on them.
Best Buy, the world's biggest consumer electronics company, and delivery company FedEx said this week that the indications are that spending should hold up.
Evidence of a flagging consumer will worry the Federal Reserve, which meets next week to decide on what, if any, further stimulus measures the economy needs.
Separate data released yesterday showed that Fed chairman Ben Bernanke has little to worry about on inflation. Underlying inflation, which strips out food and energy costs, was flat at 0.1pc in August. Analysts at Commerzbank commented that "US economy seems to be too weak too generate meaningful inflationary pressure but also too strong for a fall into deflation."
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