November 27, 2013
Thomson Reuters/University of Michigan: Stock Gains Offset Concerns About Economic Policies
ANN ARBOR. Consumer confidence rebounded in late November, shaking off the last remnants of the federal shutdown. The November increase was due to an improved outlook for the economy, with the gains primarily among upper income households. Increases in household income and wealth were reflected in more optimistic personal financial assessments among those in the upper third of the income distribution, whereas households in the bottom third reported declines in their incomes as well as negative changes in their net worth. The current state of consumer sentiment is consistent with an economic growth rate slightly above 2%, largely stimulated by wealth gains not improvements in jobs and wages. This amounts to continued economic stagnation, which can be defined like the Fed's definition of stable prices, at about 2%—the average GDP growth rate in the past few years.