Consumers appear slightly more confident
Americans seem to be taking their economic cues from Alfred E. Newman, the famous grinning mascot of Mad magazine, whose famous catchphrase was "What, me worry?"
This represents a sea change from the more recent attitude of fear of the future and terror about the present. One of the signs of this growing optimism are the figures collected on consumer confidence. According to Bloomberg, the Reuters/University of Michigan preliminary index of consumer sentiment rose to its highest level in nine months.
The figure -- which was less than expected -- underscores the growing belief among economists that the recession will end in September. Signs in the troubled areas of the economy, such as housing and manufacturing, are getting better.
This recovery, though, appears fragile and could be undermined by rising oil prices or a dramatic uptick in the jobless rate, which is expected to hit double digits before the end of the year.
"Confidence is slowly but surely coming back," James O'Sullivan, a senior economist at UBS Securities LLC told Bloomberg News.
Americans increasingly think it's a good time to buy big-ticket items such as cars and appliances, pushing the confidence index up from 67.7 to 74.5, the highest level since September.
Retailers such as Wal-Mart Stores Inc. (WMT), which people seek out for its low prices, should benefit as consumer confidence begins to recover. The economic turmoil has left many Americans shell-shocked. They will be unwilling or unable to part with their cash no matter how much their financial situation improves.
Also, businesses may find it difficult to get rid of sales gimmicks they employed because of the recession, such as zero percent financing.
But there is no doubt that the public sees things are better -- though not all better. Instead of worrying about being homeless and eating from soup kitchens, people just accept that the economy is bad. The good times have not rolled quite yet.
"The Federal Reserve said on Thursday that the net worth of U.S. households plunged by $1,300bn during the first three months of the year," according to the Financial Times. "Falling home prices and rising job cuts have sapped 2.5 per cent of household wealth in America in the first quarter, leaving it at $50,400bn."