Although there was little growth in the first half of the year, there are signs that U.S. Consumers are in more “upbeat moods” than in previous years.
This is welcome news for retailers, advertisers and media buyers who are have had to deal with the struggling economy since late 2007. According to the Conference Board, a private research group, consumer confidence rose to 90.0 in July, up front 86.4 in June. July’s reading is the highest since October 2007, which was just before the latest recession. It also broke through previous estimates made by economists surveyed by the Wall Street Journal.
A good sign? Economists are hoping that this happiness indicator is a sign of better things to come – and there are several signs that point to this being the case. So far, the economy has been “treading water” during the first half of 2014, with slight upticks. Improvements in consumer confidence and other factors are painting a better picture for the third quarter. For example, manufacturers in New York, Philadelphia, Texas and Plains States said their new orders increased in July – and a rise in demand will keep production lines growing.
In addition, the consumer-confidence survey suggested that faster income growth may be on the horizon. More consumers think their incomes will increase in the next six months, and that figure has been crawling higher throughout the last year. There has been a steep decrease in the number of people who fear a pay reduction.
There may be more welcome news coming as well. This month the GDP report is expected to reveal that there will be a 3% annual gain in gross domestic product. It would offset the 2.9% decline in the first quarter. Household consumption, increases in private inventories, trade and an up-ramping in production would be welcome news in the GDP report.