September 27, 2013

Thomson Reuters/University of Michigan: Policy Uncertainty Dims Consumer Confidence

ANN ARBOR. Confidence fell in September as consumers were more likely to anticipate a slower pace of economic growth, fewer job opportunities, and less favorable personal financial prospects. While few consumers expected a federal shutdown, complaints about the economic policies of the government have risen. Indeed, spontaneous negative references to the government’s policies were twice as high as three months ago, although still below the levels recorded during last December’s fiscal cliffhanger. Moreover, despite the unexpected delay in tapering by the Federal Reserve, two-thirds of all consumers expect higher interest rates in the year ahead. Unless diminished by the dysfunction in DC, confidence is sufficiently positive to support a 2.5% growth rate in consumption.

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