American consumers are not trusting on their economy much as consumer confidence reached a four-month low. The latest data reveals this unexpected drop in the consumer confidence of world’s largest economy. The Conference Board’s index was 101.4 recently and it decreased to 95.2, as per the number released by a private research group in the New York. The figures were lower than projections through a Bloomberg survey.
The consumers will be more cautious towards spending. Income expectations were lowest, though job availability was enough in last four months. The labor disputes at the West Coast along with severe winter weather in the North America have resulted in this slow down. The stronger dollar can only boost the demand now. Chief Economist Jim O’Sullivan from High Frequency Economics based in New York said that low gasoline prices would have resulted in positive situation but now prices are increasing. Nominal wages are also increasing but that is not big deal as of now.
In January, the conference board gauge increased to 103.8, highest since August 2007. During the last expansion period, the number reached 96.9 and the index dipped down to 53.7 during a recession period in June 2009. The Bloomberg survey gave median forecast gain of 102.2. The survey comprised responses of 77 economists which gave results ranging from 99.5 to 105. The property rates in 20 cities across the United States showed more growth than expected. The growth rate was around 4.2 percent this year. Faster wage increase can definitely improve this situation.