If you were to judge consumer confidence by the amount of doomsday news stories on the upcoming fiscal cliff, you would most likely predict that consumer confidence would be low, but that is not the case.
Despite all the negative headlines predicting the economy is about to crash, consumer confidence is currently sitting a four-year high. The Conference Board’s confidence index climbed to 73.7, a level we have not seen since early in 2008.
This comes at a good time for retailers hoping for a strong holiday shopping season, and we have already seen some of that with strong sales taking place over Black Friday.
Retailers are not the only ones who will benefit from the rise in consumer confidence, as homebuilders will also get a nice boost. The report said the number of people considering the purchase of a new home rose to a record level as improving home values and low interest rates continue to help fuel the recovery we have seen in the housing market this year.
What is even more impressive is that the confidence index would most likely have been even higher if not for super storm Sandy that pummeled the northeastern coast of the U.S. Consumer confidence in that region fell to a three month low.
If consumers remain confident the economy should continue to improve next year, but a lot of that will be determined by the ability of a divided Congress to work together to solve the fiscal cliff problem.
How are you feeling about the overall economy? Leave us a comment and let us know your thoughts!
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors.