• People’s view of the economy is turning for the better. A record high stock market and continuing job additions are no doubt contributing to the better feelings. That in turn could move the economy into a virtuous cycle of further improvements since confident people spend more money into the economy.
• Numerically, the consumer confidence index rose to 85.2 in June to its highest reading in over 6 years. However, we should note that the long-term average is closer to 100. That is, consumers are seeing improvement, but we are not yet back to normal average conditions.
• Rising confidence is leading to more purchases of vehicles. Since automobiles and trucks are typically the second-most expensive item that consumers buy, it is hoped that confidence also begins to rub off on those buying the top-most expensive item, which is a home.
• The movements of consumer confidence are one of the cheapest economic stimulus measures. It does not cost taxpayers a dime. At times, a national leader through actions and speeches can lift the national mood, which can subsequently raise economic growth prospects.
• Some claim we all can individually have power over our mood. The great English philosopher John Milton, for example, believed in the power of the mind: “One can make heaven of hell and hell of heaven.” It’s all about the mind. And many research studies have shown that people with optimistic outlook on life generally do measurably better financially and in health than others who are less optimistic.
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