The end of 2020 brought some encouraging news for the United States economy. Consumer confidence rose to its highest level since March as fears of a potential recession abated significantly. This marks the end of a remarkable year of economic growth despite the challenges of the pandemic.
The consumer confidence survey conducted by The Conference Board rose to a reading of 92.9 in December, the highest since March when it declined sharply from 130.7 to 86.3 as the pandemic spread. The strong reading comes despite the disruption to businesses and jobs caused by the virus. Unemployment in the US reached a post-World War II era peak of 14.7 percent in April before easing every month since.
The statement released by Conference Board’s Lynn Franco, Senior Director of Economic Indicators, suggests the confidence is likely due to falling infection rates and the successful deployment of COVID-19 vaccines. “The sharp rise in Consumer Confidence in December, following five consecutive monthly declines, was driven by a more positive assessment of current conditions and, more importantly, the short-term outlook,” Franco said.
The surge in consumer confidence is also a sign of growing optimism over the economy’s recovery in 2021. Recent data showed the economy grew at a record 33.4 percent annual rate in the July-September period, indicating the nation is emerging from the recession. The U.S. Treasury Department’s December budget deficit of $303.7 billion was the smallest since April, suggesting the economic rebound is beginning to pay off with higher tax revenue.
It remains to be seen how the economy will fare in 2021. However, rising consumer confidence provides strong evidence Americans are prepared to make the most of the new year. The news of economic growth indicates the nation was able to dodge the predicted recession, at least for now.
The end of 2020 brought some encouraging news for the United States economy. Consumer confidence rose to its highest level since March as fears of a potential recession abated significantly. This marks the end of a remarkable year of economic growth despite the challenges of the pandemic.
The consumer confidence survey conducted by The Conference Board rose to a reading of 92.9 in December, the highest since March when it declined sharply from 130.7 to 86.3 as the pandemic spread. The strong reading comes despite the disruption to businesses and jobs caused by the virus. Unemployment in the US reached a post-World War II era peak of 14.7 percent in April before easing every month since.
The statement released by Conference Board’s Lynn Franco, Senior Director of Economic Indicators, suggests the confidence is likely due to falling infection rates and the successful deployment of COVID-19 vaccines. “The sharp rise in Consumer Confidence in December, following five consecutive monthly declines, was driven by a more positive assessment of current conditions and, more importantly, the short-term outlook,” Franco said.
The surge in consumer confidence is also a sign of growing optimism over the economy’s recovery in 2021. Recent data showed the economy grew at a record 33.4 percent annual rate in the July-September period, indicating the nation is emerging from the recession. The U.S. Treasury Department’s December budget deficit of $303.7 billion was the smallest since April, suggesting the economic rebound is beginning to pay off with higher tax revenue.
It remains to be seen how the economy will fare in 2021. However, rising consumer confidence provides strong evidence Americans are prepared to make the most of the new year. The news of economic growth indicates the nation was able to dodge the predicted recession, at least for now.
