Economy's big driver still on sidelines, CUNA tells Reuters:

WASHINGTON (9/1/09)--Credit Union National Association Chief Economist Bill Hampel had the lead quote in an article widely distributed by Reuters Friday about consumer confidence and the pressure on households from falling housing prices and increasing unemployment, which translates to a reluctance to spend.

"The big driver of the economy is still on the sideline," Hampel told the news outlet. "The household sector is worried about the job market and until that shows some significant improvement, households are going to be pretty restrained," he said.

Several reports indicate that although reports about home sales and factory activity and others are seemingly upbeat, consumers likely will play a limited role in the recovery from the recession.

U.S. consumer confidence dropped to a four-month low in August, while consumer spending saw a modest increase during July, indicating what could be a lethargic recovery from the recession.

The Reuters/University of Michigan Surveys of Consumers Friday said its final index for confidence during August dropped to 65.7--the lowest measure since April. In July, the index was 66.

Meanwhile consumer spending inched up 0.2% during July, said the Commerce Department, after increasing 0.6% during June. The spending was the result of the government's Cash for Clunkers program, which fueled auto demand.

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