|Posted by G on April 4, 2011 at 12:12 PM|
The Commerce Department says consumer spending rose 0.7 percent in February. But a big part of the increase went to cover higher prices for gas. High gas prices were a big reason for the increase in spending. Economists are concerned that if energy costs keep going up, it will cut into household budgets and leave consumers with less money to spend on other items. After adjusting for inflation, consumer spending actually rose just 0.3 percent.
The economy, as measured by the gross domestic product, grew at an annual rate of 3.1 percent in the October-December quarter. This represented the strongest performance since the start of last year when the economy was growing at a 3.7 percent rate. So this number that Economists say needs to average around 5 percent for a year just to lower the unemployment rate by 1 percentage point is actually lower than it was a year ago.
According to The Conference Board, U.S. consumer confidence fell in March. The index of consumer attitudes fell to 63.4 in March from a revised 72.0 in February. The expectations index slipped to 81.1 from 97.5, while consumers' expectations for inflation in the coming 12 months hit its highest level since October 2008. The Consumers' labor market assessment worsened. The "jobs hard to get" index rose to 44.6 percent from 44.4 percent in February, while the "jobs plentiful" index slipped to 4.4 percent from 4.9 percent. Those expecting more jobs in the months ahead declined to 19.9 percent from 21.2 percent, Respondents expecting business conditions to improve over the next six months declined to 20.6 percent from 25.2 percent, And, those expecting business conditions to worsen increased to 16.2 percent from 10.3 percent.
Companies trimmed their orders for long-lasting manufactured goods in February with a key category that signals business investment falling. The Commerce Department says that businesses reduced orders for durable goods 0.9 percent last month, and reduced orders for capital goods by 0.7% the fourth decline in the past five months.
According to the associated press global economy tracker, out of 22 countries representing more than 80% of global output, the U.S. job market is shown to be the weakest. This report also showed that there are still 5.4 percent fewer American jobs than in December 2007.
Americans are growing increasingly pessimistic about the economy. A new Associated Press-GfK Roper Public Affairs and Corporate Communications poll shows only 15 percent of Americans surveyed said they believed the economy had improved over the past month, compared with 30 percent who had thought that in January. Only a third surveyed were optimistic of better times ahead for the country, down from about half earlier this year. And 28 percent thought the economy would get worse, the largest of slice of people who have expressed that sentiment since the question was first asked in December 2009. Just a note, we were still in the midst of the recession in December 2009.