The level of consumer confidence in the United States rose unexpectedly in November, rebounding from a record low. This surprising change apparently came as concerns about the rising rate of unemployed coupled with tumbling financial markets was alleviated by falling gas prices. The Conference Board’s index of consumer confidence suddenly climbed to 44.9, which while the second lowest reading since 1974, is still a nice rise from 38.8 which was recorded last month. A separate report showed that home prices were continuing to drop, which was further undermining the level of consumer spending.

Consumers are retrenching themselves amid a startling increase in job losses and falling stocks and home prices, especially amidst what is being regarded as the worst credit crunch in more than seven decades. Still, the falling gasoline prices along with the end of political uncertainty have conformed consumers somewhat, according to some economists. Consumers are still largely hunkered down accordingly to financial economists, and a contraction in consumer spending is still expected in this forth quarter. Still, since the consumer confidence was projected to remain at around 38 in this month following the 38 that was reported in October, many economists are surprised to have seen an increase in consumer confidence as a result of the lower gas prices this month.

Earlier today, the S&P / Case Shiller home price index taken for 20 United States metropolitan areas in September showed a drop of 17.4 percent from a year earlier, which is the largest change since 2001 when year over year records began. The economy contracted at around a 0.5 percent annual pace between July and September, which was more than was initially estimated. Consumer spending began to drop at the quickest pace since around 1980. Stocks did manage to maintain earlier gains since the Federal Reserve took new steps to unfreeze credit options not only for homeowners, but also consumers and small businesses as well. The central banks committed as much as $800 billion dollars to these new initiatives hoping to create change in consumer confidence and spending accordingly.

The housing slump, which is what was responsible for triggering the credit crisis in the first place, is probably going to extend at least into a forth year. Foreclosures continue to run at a record rate, which is increasing how many properties are going up for sale, and is pushing home prices down in the process. Luckily, the outlook on the entire thing is improving. The improvement in consumer confidence this month is reflecting the general expectations among consumers that the economic situation cannot get much worse than it already is. Despite the improvement in consumer expectations index this month, consumers still seem to remain extremely pessimistic. Accordingly, the possibility that the economic is going to improve in the first half of the following year is still going to remain highly unlikely unless the economy experiences a great amount of positive change in the next couple of months.

Photo Credits: 1

Related Posts

• Managing Stocks in an Economic Crisis 2008 is showing all of the hallmarks of being a difficult year financially, and for this reason, having control over your cash flow is absolutely vital. Managing stocks in an economic crisis is one of the best possible defenses that you can take during the credit crunch. By monitoring the......
• Just How Safe is Your Money Right Now? Even after the government took the opportunity to step in and bail out one of our largest insurance companies, the stock market still managed to find a way to completely tank, because many investors were not persuaded that this intervention was going to protect their investments. This is when you......
• President-Elect Obama Roundup Another edition of the RCDL roundup. Congrats to President-Elect Obama for winning the election! Frugal | Money Saving Tips: The Christian Science Monitor takes a look at when gift-card promises go unfulfilled. Good points for holiday shoppers. Financial Ramblings writes this winter tip: The Most Beautiful Way To Save Money......
• Welcome to the Carnival of Credit Report Stories Welcome to the November 10, 2008 edition of credit report stories! Rich Credit Debt Loan is happy to host the latest edition of the Credit Report Stories carnival. We hope you enjoy the posts and find many worthwhile articles. Below are our editorial picks: Credit Karma presents Balance Needed As......
• How to Avoid the Three Worst Financial Traps No matter how wealthy or poor you are, there are financial traps that are waiting to disrupt your lives. Many people end up finding out too late that they are in the depths of one and it is nearly impossible to get out. However, there are specific steps that you......

Online Stores

• Fisher Price By Brand, Company, Character Dolls Dolls Bears
• Index Cards Basketball-NBA Autographs-Original Sports Collectibles
• Index Cards Boxing Autographs-Original Sports Collectibles
• Price Guides Supplies Comics Collectibles
• Credit, Charge Cards Trading Cards Collectibles

If you liked this article, vote for it on del.icio.us and stumbleupon.


Categories:

Money, News, Personal Finance, credit, economy

Tags:

consumer spending, consumers, contraction, credit crunch, financial economists, financial markets, gas prices, gasoline prices, index of consumer confidence, job losses, more than seven decades, political uncertainty, report showed that, startling increase, Stocks, united states