Feel-good end to 2012
American consumers told surveyors they're feeling good about the economy. Proof has been abundant at cash registers, where shoppers have taken advantage of big sales over the holidays.
The Consumer Confidence Index, which measures monthly how Americans feel about the economy, surged almost 10 points in December to a near post-recession high. The index reported positive movement in several important categories, from consumers’ feelings about business conditions to how much they’re taking home in their paychecks. This is the second consecutive rise in the index, after November recorded a 15-point jump.
And Americans weren’t just talking about spending -- they were putting their wallets where their mouths are. Online shopping on Christmas Day grew 16.4 percent over last year as people powered up their new iPads and dove into the heavily discounted arena of online holiday sales.
An Associated Press survey of three dozen economists found optimism amongst wonks as well, who expect the economy to grow 2.4 percent in 2012. That would be a healthy gain over this past year, which saw it grow at a rate of less than 2 percent. They also predict an improved jobs situation, including a steady increase in the monthly job creation numbers.
It’s natural to think happy thoughts in the second half of December. Many of us are taking time off, lounging around the house in warm sweaters, and eating high-fat foods that make us feel cozy and secure. Even economists overdose on holiday cookies and nap on the couch this time of year.
But numbers and surveys should be taken with a grain of salt. While confidence and consumer spending are up somewhat from the disastrous levels of the past couple years, we aren’t out of the woods yet. Sure, those who told the Conference Board’s Consumer Research Center that jobs are "plentiful" increased from 5.6 percent to 6.7 percent in December, but people who said jobs are "hard to get" was at a fear-inducing 41.8 percent.
Not to sound like the Grinch, but we all know that Europe’s slide into recession could bode ominously for Americans. In fact, some think an Italian default could mean strong recovery bets are off.