American' Optimism About the Economy Rising

New York, NY, January 19, 2024-"Americans’ gloomy mood about the economy is showing signs of lifting,” reports the Wall Street Journal.

“Persistently high inflation, the lingering shock from the pandemic’s destruction and fears that a recession was around the corner put a damper on feelings about the economy in recent years, despite solid growth and consistent hiring. 

“Americans are now bucking up as inflation cools and the Federal Reserve signals that interest-rate hikes are likely behind us. And with the solid labor market putting money in the bank accounts of freely spending consumers, recession fears for 2024 are fading.

“The share of consumers in December who expected to be financially better off a year later reached the highest level since June 2021, according to a Federal Reserve Bank of New York survey. Consumer confidence last month saw its biggest one-month gain since March 2021, according to the Conference Board. A separate measure of consumer sentiment from the University of Michigan advanced nearly 14% last month.

“Despite the recent sentiment gains, the measure is still near levels consistent with an economy just emerging from a recession-not one that recorded surprisingly strong growth last year. 

“A drop in gasoline prices has encouraged Emma St. Onge, a college student from Springfield, Mass., because it means she gets to keep more of her money in her pocket, including what she earns from her part-time job on campus. 

“‘I feel like I can do more because my money goes farther,’ she said. ‘Hopefully people will start to struggle a little less, and therefore things will hopefully get better.’

“A better mood among Americans is good for growth since happier consumers are, on balance, likely to keep spending-and that consumption drives around two-thirds of the U.S. economy.