News Column

Consumer Confidence Surging, But Some Skeptical

May 29, 2013
skeptical man

Americans are more optimistic about the economy than at any point in the last five years, according to a Tuesday report from the Associated Press, but locals seem skeptical about the news.

A New York-based private research group, The Conference Board, said its consumer confidence index rose in May to 76.2, up from a mark of 69.0 in April and the highest since February 2008.

But Terry Coleman, who worked as an automatic door service technician for five years, said he has a hard time believing the good news.

"I was just laid off, so in my opinion it is getting worse despite the inflated numbers the president and media try to show us," said Coleman, of Hesperia, whose main clients are hospitals and medical facilities. "Unless it's a safety or security issue they are not calling for repairs."

Aaron Korn of Victorville believes the economic spike is simply a fluke that will be short-lived.

"I am not spending more, and I have very little confidence in the economy until federal monetary policies are drastically changed," Korn said.

The jump in consumer confidence followed a separate report that showed the housing market is strengthening. Home prices jumped 10.9 percent in March compared with a year ago, the most since April 2006, according to the Standard & Poor's/Case Shiller 20-city index. All 20 cities showed year-over-year gains.

The economic news helped send the Dow Jones industrial average up 106 points to close at a record. The Dow has rocketed nearly 18 percent this year. And the Standard & Poor's 500 stock index is on track for its seventh straight monthly gain, the longest winning streak since 2009.

Higher home prices and stocks gains are making Americans feel wealthier. That has offset some of the pinch from the tax increase and kept consumers spending.

But confident consumers are hard to find in the Victor Valley.

Bob Chandler, a retired fire captain who lives in Summit Valley with his wife, Verna, said the couple's fixed income "may need some fixing" if the prices of food and gasoline keep rising.

"We have a lot more confidence in the consumer than in whatever news about the economy comes out of our elected officials in D.C.," Chandler said.

The economy has added an average of 208,000 jobs per month since November. That's well above the monthly average of 138,000 during the previous six months. Unemployment has fallen to a four-year low of 7.5 percent.

But that number may be misleading because many people have given up looking for work. The government counts people as unemployed only if they are actively searching for a job.

"It's been 18 months since my company let me go," said Vince Amaro, 60, a former security guard from Victorville. "There are days when I just want to throw in the towel and stop looking because there are no jobs."

The economy grew at an annual rate of 2.5 percent in the January-March quarter, up from a rate of just 0.4 percent in the October-December quarter. The fastest expansion in consumer spending in more than two years drove economic growth in the first quarter.

Many economists believe growth is slowing slightly in the April-June quarter to a rate of between 2 percent and 2.5 percent. But there is hope among some economists that growth will strengthen in the second half of this year, boosted by the gains in housing and employment.

Source: (c)2013 Daily Press (Victorville, Calif.) Distributed by MCT Information Services

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