Friday, January 13, 2012
Drinking the Kool Aid: Consumer Sentiment Optimistic About Economy
Still riding the holiday shopping high, Americans are feeling more optimistic about the economy than they have in almost a year, according to data released Friday. Yet with credit card spending on the rise and unemployment still high, it's unclear whether this cheer is anything more than blissful ignorance.
According to the most recent Thomson Reuters-University of Michigan survey, the consumer sentiment index rose to 74 in early January, up from 69.9 in late December, as Dow Jones reported. This is the highest level the index has reached since February 2011.
The index, which is calculated bi-monthly, surveys consumers' assessments about the overall state of the economy, as well as their own personal finance and spending habits.
One big reason people may be feeling optimistic is the recent dip in the unemployment rate to 8.5 percent in December. With the new-found security of a paycheck, it's easy to dream about all the things you will buy. What's not clear is whether consumers will actually be able to afford these dreams…