Consumer Confidence Index Reaches Highest Level Since April.
You’re sick of hearing warning after warning of the possibility of a recession, which is normal. Experts have been warning for months regarding an economic slowdown. So it’s tough to be happy regarding the economy given all of this.
However, new data suggests that people are optimistic regarding the current economic situation. In fact the Conference Board’s monthly consumer confidence index was at 108.3 in December, that’s a big increase of 101.4 in November. This is also the highest reading since the month of April.
Consumers are feeling more comfortable overall
It’s not difficult to understand why people feel better about the economy today as opposed to in the past few months. The first thing to note is that inflation has decreased. It’s important to be clear that prices for living are more expensive than usual and many have to build up larger debt on credit card balances to pay for their costs. However, we’re not seeing the same rate of inflation that we saw in the summer.
Additionally, the cost of gas has dropped significantly since they reached their peak at the mid-year mark. It could result in a boost to confidence among consumers.
The national unemployment rate is near the lowest rate since the last 20 years. And not only that, this gig economy is on the rise. In spite of a recent round of layoffs at large tech companies, there’s still plenty of jobs available to be found.
Are recession fears overblown?
The primary reason why economic experts have been warning of the possibility of a recession hasn’t had anything to do with the present situation of the economy. Instead, it’s due to the fear (grounded fears) about the fact that Federal Reserve’s rate of interest rate policy can trigger an economic slowdown.
— Royal Newsfeed (@RoyalNewsfeed) December 31, 2022
The Fed has been increasing interest rates as a way to curb the pace of inflation. This has made it more costly for consumers to get loans in almost every possible category from automobile loans, to home loans. If people begin cutting their spending significantly due to higher prices for borrowing this could cause a recession.
So, the warnings that we’ve heard are valid. However, whether the recession actually will hit us in 2023 has yet to be established.
There is a chance that Fed’s rate rises could only lead to some modest reductions in spending, but it’s not an entire one. In that scenario there’s a chance that we’ll be spared an economic recession.
Furthermore, when the mood of consumers is good, it is a reason to spend more. Since it’s obvious that people are feeling satisfied with the current economy’s overall health this alone may suffice to prevent any recession in the coming year.
If you don’t have the benefit of a crystal ball it’s impossible to determine what the next twelve months will bring. It’s equally important to keep the warnings about recession in the context of.
They’re intended to motivate consumers to increase their savings accounts and not be a threat to them just for the fun of it. While we might continue to see things change for the worse in 2023 hopefully the warnings have served their purpose of encouraging consumers to increase their emergency fund in the event of.
If you’re using a faulty debit or credit card, it could cost you a lot of money. Our experts recommend this card one, with a 0 APR for the first year up to 2024, an incredible cash back rate that can go 5 percent to 10% and all this without an annual cost.