Consumer Confidence On The Rise This Month

How are you feeling about the economy these days? The University of Michigan (UM)/Reuters Consumer Confidence Survey says you're feeling a bit better, but warns that consumers are unsettled by the widespread distruct of government.

“Consumers have always trusted the government to initiate policies that would foster renewed growth in jobs and incomes. The widespread distrust of the President, Congress, and the Federal Reserve is now an important cause of pessimism," said Richard Curtin, chief economist for the survey.

"The upcoming debates about spending cuts and tax hikes surrounding the budget resolution will increase uncertainty and cause consumers to become even more prudent spenders," Curtin cautioned. "Although a renewed downturn in the economy has a 50-50 chance of starting around the start of 2012, it is even more likely that growth will not be robust enough to restore consumer optimism about their job and income prospects.”

The survey found that consumer sentiment rose this month to the highest level in the last five months, as gasoline prices moderated and the economy managed to produce 90,000 jobs last month.

Though the confidence numbers were actually higher than most analysts expected, the fact that sentiment rose does not come as a surprise. The last retail sales numbers were strong and the third quarter ended with a fairly strong back to school shopping season.

The problems in Europe hardly seemed to phase U.S. consumers. They not only felt better about present economic conditions but also are more optimistic about the future.

Healthcare, however, is one area where consumers are not so bullish. The UM/Reuters Consumer Healthcare Sentiment Index dipped from 98 to 96, wiping out the modest uptick seen in August and September. The index’s baseline measurement of 100 was set in December 2009.