Despite the latest news from various analysts about the end of the global economic crisis the average US consumer still does not feel safe. Consumer confidence is down in numbers in comparison with previous months.
What could be the main cause for this? Yes the analysts say that the crisis is over and predict soon recovery, but in reality the everyday consumer still does not feel the difference. Basically the consumer is completely right because until now the recovery is still a recovery on paper. While different indexes and other economic tools might prove that the crisis is defeated in real life there is no actual change. Salaries are still low and unemployment levels are still very high. There are still no realistic guarantees that the unemployment level will not grow further and many more people lose their jobs. This is actually quite possible as for many countries winter is nearing and this means no more seasonal jobs. The consumers are very concerned about long term income as no one can guarantee that. I believe that the confidence will grow, but it will take some time. If you would ask me to predict I would say that overall consumer confidence will start to improve beginning 2010, but only if the predictions about recovery come true.
Nevertheless there is a positive change in the US market. Home prices are starting to grow. Although they are still far behind 2008 levels this is considered to be quite significant.
Confidence is very important and the only thing that can influence it is stability. The faster countries and the whole world itself regain stability the sooner the consumer confidence will return.
