EconomicCrisis.US

Consumer confidence snapped back more than forecast in November as Americans turned less pessimistic on the outlook for jobs and wages, one reason why spending has jumped at the start of the holiday season.

The Conference Board’s index increased to 56 from a revised 40.9 reading in October, the biggest monthly gain since April 2003, figures from the New York-based private research group showed today. The gauge, at a four-month high, exceeded the most optimistic forecast in a Bloomberg News survey.

The improvement in sentiment may help sustain household purchases, which account for about 70 percent of the economy, after sales climbed on Nov. 25 and Nov. 28, so-called Black Friday and Cyber Monday. Another report showing home prices continue to drop raises the risk that, without a pickup in hiring, consumers will retreat in early 2012.
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First, let’s consider what makes this time slightly different than previous times of unrest. The essential facts are that most Americans are suffering through the deepest economic depression since the 1930s. We barely avoided a complete economic collapse and may still see an economic collapse if the euro fails. With so many homes worth less than the loans against them, the American consumer economy is simply upside down. This is unique in our history — unprecedented home ownership with unprecedented loss of value. Second, the disparity in wealth between the top 1% and rest of American society is huge. Although wealth disparity has occurred in the past, this time around it is highly noticeable because of the media. There is also a complete social disconnect between the elite wealthy segment of society and everyone else. The very wealthy just do not understand the economic pain of the average American.
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Shoppers lured by deep discounts and early store openings sent sales over the four days starting on Thanksgiving soaring 16.7 percent over the same period a year ago to $52.4 billion, according to the National Retail Federation.

“American consumers are taking a deep breath and making the decision that it’s okay to go shopping again, in spite of high unemployment and uncertainty over the stock market and housing market,” Ellen Davis, vice president of the trade group, said during a media briefing Sunday.
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The US economy will continue its slow growth next year and joblessness will remain high, according to a survey released this morning by the National Association for Business Economics.

“Economists responding to the latest NABE Outlook Survey expect moderate economic growth through 2012, with little likelihood of another recession or an outbreak of inflation,” said NABE Outlook Survey Chair Shawn DuBravac, chief economist at the Consumer Electronics Association.

In the survey, those who responded expect inflation-adjusted gross domestic product, known as real GDP, to grow at 2.5 percent in the final quarter of 2011 and 2.4 percent in 2012.
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