Consumer sentiment is on the rise

08.09.09
By Lewis Green

Although consumer sentiment has fluctuated over the past few months as Americans struggle to stop foreclosure and pay off credit card debt, a new report indicating consumers are feeling better about the economy is buoyed by the latest economic figures.

The most recent RBC CASH (Consumer Attitudes and Spending by Household ) Index shows an increase in August after two straight months of decline. Perhaps a better indicator of the state of the economy is the fact that all four parts of the index increased this month.

Still, Tom Porcelli, the U.S. economist with RBC Capital Markets, says the unemployment figures will remain troubling for some time until the economy has reached recovery.

But despite the problems in the job market, American consumers appear to be warming to the idea of opening their wallets with 25 percent saying they are "more comfortable" making purchases for their household than they were six months ago - up from 19 percent in July.

Additionally, 34 percent of respondents said they believe the economy in their area will be improved in six months compared to 31 percent last month. Conversely, 19 percent said the economy would decline over that same span - down from 24 percent in July.

These numbers may match the recent figures from the Commerce Department which found that consumer spending increased 0.4 percent in June while the savings rate fell to 4.6 percent after rising to 6.2 percent in May.

More Personal Finance Articles | News Home | Discuss in our Forum

Americans are growing more optimistic about the economy