Obama’s win in the recently concluded presidential race has renewed hopes for a better economy. The high hopes seem to be fueled by the Democrats as they urge everyone that the economy will fare better than it did in the last decade.
This November, the number of households projecting the economy will rise to about 37 highest. According to the Bloomberg Consumer Comfort Index, this is expected to be the highest increase since March of 2002. From the results of the survey, the expected monthly spending will improve from a minus 7 to a strong 4. It must be remembered that about 70% of the economy is dependent on consumer spending and with data this promising, it is very likely that the economy will greatly improve in the coming months too.
To pair off the rather high survey results on consumer spending, industries became more active too. Jobless claims have reportedly dropped, which means two things: that the companies are no longer laying off massively and that there are fewer people who are actively seeking employment. Analysts say that employment is the primary thrust of the US President Obama during his campaign and the business sector has been very supportive.
Other than these, the holiday season comes into play for the good of the economy. The increase in the value of homes, the better employment rate and the decrease in gasoline prices are increasing the ability of homeowners to spend. Hence, retailers are gearing up for sales for the coming months.
The expected improvement in consumer spending will help lawmakers delay or if not, cancel, the planned execution of state budget cuts and an increase in tax collection on 2013. The fiscal budget cuts and tax increases, according to Federal Reserve Chairman Ben Bernanke, will helps stabilize the economy.
As of last week, the US Labor Department has confirmed earlier talks of better employment. Based on their data, application for jobless claims went down by 41,000 to 410,000. The effect on labor caused by the super storm Sandy is also beginning to better and subside.
As a matter of fact, banks report an increase in debt collection as more able employees earn enough from their jobs. This goes the same with the bad credit loans offered by non-traditional lending firms.
How The World Economy Is Affecting The US
The US stocks reportedly went up as the Israel and Palestinian militant agreed to cease fire and give way to peace talks. This development pushed the Standard and Poor’s 500 Index up at 0.2 percent to 1,391.01 for the last four consecutive days. Meanwhile, the 10-year Treasury note gained from 1.68 percent to 1.67 percent.
In addition, Britain’s budget deficits widened last month which resulted to the government spending more. The economic slump also pushed tax revenue from companies. Japan is also struggling along with Europe and China’s slowdown. In fact, Japan’s export shipments went down by 2.3 percent compared to the same period last year.
“It’s Purely Political”
According to the survey conducted by Bloomberg, larger portion of the population expecting to see a better economy after Obama’s re-election is coming from the Democrats. 63% of the Democrats believe that the economy will get better by upto 12 percentage points. About 26% of those who believe the same come from independents while the remaining 15% come from the Republicans.
The President of Langer Research Associates in New York, Gary Langer, says that the gain is largely political in nature. There still needs to be more data needed to confirm all the views of economic gains. Obama has four more years to confirm everything else.