Consumer confidence edges up

02.02.09
By Lewis Green

Amid the regular barrage of gloomy headlines, consumers saw a mild ray of hope in January, according to a new poll.

The Reuters/University of Michigan Survey of Consumers reported a rise its index from 60.1 in December to 61.2 last month.

Experts suggested that a number of factors may have led to the upward bump, such as excitement over the recent presidential election and its promise of change. Certain economic indicators may also have played a part.

"Consumers may be less worried in January than December, perhaps because of lower gasoline prices and more stable stock market," Mark Zandi, chief economist at Moody's Economy.com, told Reuters.

The survey's lowest point since its creation in 1952 was recorded in May 1980, when sentiment stood at 51.7. According to the survey, the most recent score remains higher because the majority of people do not expect that the current recession will sink into a depression.

But a number of recent reports are yielding findings that increasingly suggest the economy is not likely to turn around during 2009.

Commerce Department figures reveal the economy contracted by 3.8 percent in the fourth quarter of 2008. Personal consumption fell by 3.5 percent, as consumers drastically slashed their spending.

Meanwhile, the amount of money Americans were saving rose during the final three months of the year. Some 2.9 percent of the average person's disposable income was devoted to savings during that period, compared with 0.2 percent in the first quarter.

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The election, gas prices and the stock market helped improve confidence