Sentiment among US consumers rose more than expected in August and expectations hit the highest level since the recession began, indications that Americans' pessimism about the economy may be lifting. The housing sector also showed signs of life as a national measure of home prices posted its first quarterly increase in three years.
However, at 54.1 the Consumer Sentiment Index is still well below 90, the minimum level associated with a healthy economy. Anything above 100 signals strong growth. Economic commentators closely monitor confidence because consumer spending accounts for about 70 per cent of all US economic activity. Consumer sentiment - fuelled by signs the economy is stabilising - has recovered somewhat since hitting a record-low of 25.3 in February earlier this year.
Many analysts expect the economy to grow 2-3 per cent in the current July-September quarter, spurred by a more stable housing market and the Cash for Clunkers program, which has boosted auto sales.
(source: Sydney Morning Herald, 25 August 2009)