An Ominous Sign for American Business
By Todd Genger
It is good news for the U.S. economy that Americans are showing renewed confidence about the nation’s economy. They have started borrowing to purchase cars and other major purchases. They have started lessening their savings that clearly indicates about their increasing confidence in recovery of their economy. A positive job report released by the United States Labor Department has boosted the confidence of both consumers and investors, stats Todd Genger. The great fear is that the European debt crisis will threaten an already shaky recovery.
A recently released independent report clearly reveals that consumer savings rate fell in November to 3.5%, the lowest rate since the start of the recession.
A number of business analysts consider the increased borrowing an ominous sign. Many of them say that the spending is the result of increased earnings and employment, since when earnings increase, their capacity to spend also increases and people are confident they can repay their loans or credit card bills, shares Todd Genger. Economists believe that as markets recover, the number of jobs will increase and that will add to people’s spending capacity.
Given the weight of recent economic reports the growing investor and consumer confidence can only be seen as a positive indicator.