Consumer confidence is up, survey finds
Consumer confidence increased for the third consecutive month as Americans became slightly more optimistic about the economy and small gains in employment, according to a new survey released Wednesday.
The Thomson Reuters / University of Michigan index of consumer sentiment rose to 64.1% in November, up from an August low of 55.7% when pessimism was high after negative reactions to the congressional debate on the national debt ceiling.
Although Americans view the economy more favorably, the current index is still below the 71.6% recorded a year ago.
The failure of the congressional "super committee" to reach an agreement on deficit cuts threatens to have an adverse affect on consumers and could dampen holiday spending, said Richard Curtin, chief economist of the Thomson Reuters / University of Michigan survey.
"What will translate a political riff into an economic calamity for many families is if the payroll tax cut and unemployment benefits that are scheduled to expire at the end of December are not extended," he said.
Survey respondents reported stagnant personal finances. More households said their financial situation had worsened and cited income declines as the primary reason. However, 22% expect to see improvements in the year ahead.
The increase in consumer confidence is in conflict with people's dissatisfaction with fiscal and monetary policies. A majority of consumers had unfavorabe views of the policies of the Obama administration and the Federal Reserve.
-- Angel Jennings
Photo: Customers leave a Target store in Colma, Calif. Credit: David Paul Morris / Bloomberg