August 27, 2014

Consumer confidence is rising

Aug. 25, 2014 – Consumers were more confident in the economy in 2013 and going into the first quarter of 2014 than they have been in the last six years, according to Gallup's U.S. Economic Confidence Index.
Gallup noted that "much of the shift in consumers' attitudes toward the economy in 2013 was related to improved stock and home prices and improved job reports."
Improving consumer confidence will help credit unions as well. NAFCU Chief Economist and Director of Research Curt Long said, "Consumer sentiment is on the rise, and credit unions have benefitted from an increased demand for vehicle loans, in particular. Loan demand should continue to pick up as the labor market strengthens and real wage growth improves."
Gallup's poll also showed that consumer spending is closer to its prerecession levels. The data from its daily poll showed that during the first three quarters of 2008, consumer spending was at its highest, "reaching a daily peak of $114 in May 2008." In February and March of this year, daily spending was an average of $87.
The poll showed though that employment fears still persist. Gallup's survey found "that more Americans believe that now is a good time to find a quality job than at any other point in the previous six years." It noted, however, that as of the first quarter of 2014, only 26 percent of U.S. adults held that opinion – the most positive level recorded on this statistic since 2001 was in January 2007 when the percentage of adults with the same opinion was 48 percent. "Ultimately, to energize their spending, consumers will need to see steady, long-term job growth as well as better job opportunities and bigger paychecks," Gallup's research found.