Americans’ confidence in the economy has reached a seven month high, reports ABC news. This overweighs the huge confidence dip in August, brightening the outlook on President Obama’s reelection campaign with only six weeks in wait for the general elections.
Alternate reports show that key sectors of the economy have improved, signaling an overall improvement in the economy. One survey notes that confidence levels attained a seven month high on Tuesday following heightened expectations over increased hiring. Apparently, such confidence levels have not been noted ever since February this year. Another report details the steady increase in home values, demonstrating the sustained notable improvement in the housing sector.
The consumer confidence index rose from 61.3 earlier in August to a high of 70.3 in September. The unexpected rise in the Conference Board’s Index of consumer confidence came as a surprise to many economists. This was primarily because recent job and retail reports have exhibited a sluggish pattern.
The consumer confidence index is deemed to be a key indicator of economical health mainly because consumer spending represents close to 70 percent of economic activity in the country.
Among the reasons leading to the increased confidence, economists have noted that the increased positive outlook on stocks and the rosy housing sector were some of key contributory factors. The Standard & Poor’s 500 Stock Index has risen close to 15 percent this year. This improvement, coupled with the 1.2 percent year over year increase in home prices in July, highlights increased economic activity.
Political impact
John Ryding, the chief economist at RDQ Economics, noted that Americans were feeling better about the economy and were less likely to vote for change. Ryding however exclaimed that the survey had no particular slant towards politics. “This is like an opinion poll on the economy without the political parties attached,” he remarked.
Notwithstanding, the increased confidence is a huge plus to President Obama’s reelection campaign. An index level of 70.3 suggests that confidence is edging towards the benchmark index of 90, signaling movement towards a healthy economy. This notable improvement is the likely trigger to President Obama’s widening lead over Mitt Romney in key battlefield states
Darlene Johnson, a National Institutes of Health Employee, noted that despite the evident improvement, she was not yet certain about the future; meriting her uncertainty over the presidential candidate to back. Johnson, who voted for Obama back in 2008, noted that her financial position on Election Day would greatly influence her decision. “It will depend on how my pockets are looking. Everyday circumstances will drive my decision on how I am going to vote,” she said.
