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U.S. Consumer Confidence Rising
| published December 30, 2014 |

By Thursday Review staff

 

Spurred on toward optimism by some of the lowest oil and energy prices in years, American consumers expressed greater confidence in the U.S. economy in December, according to The Conference Board—a New York based research firm which routinely measures such conditions.

The uptick in current consumer confidence was the highest registered in more than six years. Business and economic analysts say that the rise in confidence is based on an improving job market, and lower-than-predicted rates of inflation—especially in home energy, oil and gasoline.

The Conference Board’s report aligns with similar numbers which have been released in November and December by the Federal government. The optimistic outlook is guiding some economists to say that late 2014 and early 2015 might shoo away the last vestiges of the Great Recession, which had brought a mixed bag of lingering unemployment, underemployment, falling wages, and low economic growth.

There are still problems with the overall economy. Wages have been flat for several years, held in check by businesses and manufacturers unwilling to reward workers with raises. Along with that, pessimists also point out that employee benefits have been shrinking, with fewer Americans having access to the same medical, dental or insurance coverage they once had.

Another setback may be food prices, which many experts suggest will continue to rise steadily in response to a three-year pattern of harsh winter conditions, as well as one of the worst sustained droughts in California history. California, normally the largest producer of fruits and vegetables for the U.S. market, has seen its output drop dramatically this year, with vast consequences to the price of groceries in American supermarkets.

But overall, some economists are predicting that 2015 could be the best year since before the housing bubble burst in 2008. If oil and gas prices remain low, the average U.S. household may save roughly $1100 in a one year period. Oil prices could drop even further, and retailers hope that Americans will convert that savings into some additional spending to make up for a less-than-remarkable holiday season.

The Conference Board’s current reading of consumer confidence has the highest score since early 2008, months before the collapse of Lehman Brothers and the start of the recession. The Board’s survey shows that Americans may finally be ready to make major purchases—many of them deferred for years—of household and consumer products like refrigerators, ranges and stoves, computers, and entertainment devices. And though car sales had already begun a spike last spring, the Board’s report said that the U.S. may see an additional surge in auto sales in 2015, especially as consumer confidence breeds positive reinforcement in other areas.

The weakest link in the chain toward full economic recovery is still jobs, according to the report. Although most Americans feel better about the economy, they still express concern about employment, and some worry that they may never regain the earning capacity seen in the early aught years, when wages reached their peak in the U.S.

Related Thursday Review articles:

Oil Prices May Drop, But Food & Coffee Will Cost More in 2015; Thursday Review; December 28, 2014.

Oil Prices May Continue to Drop; Thursday Review; December 23, 2014.