News Column

US Consumer Sentiment Up as Fiscal Cliff Looms

November 26, 2012
Fiscal Cliff

U.S. consumer confidence this month rose less than anticipated, though it had maintained the upward trend for the fourth consecutive month, as there was still no clear sign of avoiding the upcoming fiscal cliff, the Thomson Reuters/University of Michigan index of consumer sentiment revealed Wednesday.

The final reading of the consumer sentiment climbed to 82.7 in November from 82.6 in the previous month, compared with 84.9, the preliminary reading in the first half of this month, although it now stood at the highest level since July 2007.

The index gauging consumer expectations for six months from now, which more closely projects the direction of consumer spending, edged down to 77.6 from 79 in October, while the preliminary reading in November was 80.8.

While the index of current conditions, reflecting Americans' perceptions of their financial situation and whether they consider it a good time to buy big-ticket items like cars, rose to 90.7 from 88.1 last month, also lower than the preliminary reading of 91.3.

The index averaged 64.2 during the last recession from December 2007 to June 2009, and 89 in the five years leading up to the recession.

The White House and Congress have started negotiations to avoid tax increases and government spending cuts scheduled to take effect next year, but so far nothing conclusive has come out.

Dampened consumers' moods threatened to weigh on household spending when Thanksgiving was upcoming. It is widely believed that the U.S. economic recovery will heavily rely on the rebound of consumer spending, which accounts for about 70 percent of the overall economic activity.

Source: Copyright Xinhua News Agency - CEIS 2012