Consumer Confidence on the Rise Despite Economy's Weak Outlook

The Wall Street Journal released an article this morning which showed a bleak economic future. Demand for long-lasting manufactured durable goods, such as cars and televisions, fell 13% in August from July. This is the biggest monthly drop in almost 3 years. Businesses will not have a need for as many employees with factory production this low which will continue to leave the economy at a standstill. 

The GDP grew at 1.3% as opposed to the predicted 1.7% in the second quarter. This adjustment reflects more cautious consumer spending and less company exports along with the diminished farm stockpiles from the Midwest drought this summer. 

These reports come in despite other slow improvements in the economy, such as the housing market. Consumers are still more confident than they have been in a while which will encourage them to spend more. However, if we do not see a greater increase in consumer spending and a decrease in unemployment soon, consumers may quickly become discouraged again. 

Josh Mitchell and Ben Casselman of The Wall Street Journal say, "Adding jobs is key because with exports and business spending hurting, economic growth in the remainder of the year will hinge largely on how much consumers are willing to spend." An increase in hiring, compiled with the rising housing market and higher consumer confidence could raise consumer spending which will help expand the economy.

From The Wall Street Journal article "Data Suggests Trouble Ahead" by  Josh Mitchell and  Ben Casselman