Policy: Economy

Consumer sentiment rebounds heading into 2014

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PennAve,Joseph Lawler,Economy,Budgets and Deficits,Spending

Consumer confidence is rebounding ahead of the new year, undoing the damage caused by the Washington D.C. political showdowns in the late fall.

The Conference Board reported Tuesday that its index of consumer confidence had jumped to 78.1 in December, increasing from 72.0 in November and beating analysts' expectations. The index is now near the level it was before the 16-day government shutdown and debt limit standoff in October (the index stood at 80.2 in September).

Other measures of economic optimism have also shown Americans' fearfulness subsiding and sentiment climbing back to post-recession highs in the months following the shutdown. The Reuters/University of Michigan consumer sentiment index released for early December hit 82.5, improving over November's 75.1 number and nearing the levels reached over the summer.

Consumer sentiment indices are often regarded as a leading indication for spending. The measures, however, have moved out-of-step with consumer behavior in episodes involving political drama.

The Bureau of Economic Analysis reported earlier in the month that consumer spending remained unimpaired by the threats to the economy out of Washington, D.C., rising by 0.5 percent in November after also gaining in October.


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