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Thu December 22, 2011
Consumer sentiment edges up again - but still at recessionary levels
A monthly index of consumer sentiment shows a little improvement for the fourth month in a row.
The University of Michigan index tracks how people feel about their personal finances, and about the economy.
Chris Christopher is an economist with I-H-S Global Insight.
"Unemployment has actually fallen a bit," says Christopher. "Gas prices are down, things are looking a little easier in terms of inflation, so people are feeling a little more confident."
But Christopher notes December’s level of consumer sentiment is still lower than it was last year at this time.
Christopher says there’s not much else the federal government can do to help consumers, since Congress is highly unlikely to consider another big stimulus bill.
"And if the payroll tax doesn’t get extended, that will be a little more suffering, because people are living paycheck to paycheck in many cases."
Christopher says the housing sector continues to exert a downward pull on the economy.
Holiday retail spending will be about 5% improved over last year. But that's mainly because the price of gifts has increased. As Christopher notes, "People are spending more, but buying less."
That's likely to hurt customer satisfaction, another important indicator for economic health.