Figures from six continents showed that the confidence in the global economy is finally returning. The outlook that looked hopeless a mere month ago is now at a 100-month high. It was observed that sentiment grew faster in Asia compared to the US and Europe. Many believe that the worst may be over for their economies.
The recovery in the financial market was particularly helpful in boosting consumer confidence since it is believed that this will translate to recovery in the overall economy. Lenders like Citigroup and JPMorgan Chase reported generating income in the first two months of this year as the central bank purchased government debts and lowered the interest rate to zero.
From 5.2, the measure of confidence in the US now rose to 23.9 percent. However, Guy LeBas, the chief economist from the Janney Montgomery Scott LLC, said that “while the worst of the recession may be behind us, the path out of it will take many years”. He also noted that the financial sector escaped the worst scenario because of policy responses. Last March, the Fed has announced plans to purchase up to $300 billion worth of US Treasuries in a six-month period. It will also increase its mortgage-debt purchase to around $1.45 trillion.
In addition, 70 percent of respondents felt that it was unwise to put money in the stock market last March. This month, the figure dropped to 61 percent. Also, 51 percent felt more confident about buying a house as opposed to the 43 percent last month. It seems that Americans are becoming positive over their personal situation as well. The results of recent surveys look encouraging as people believe they will be able to keep their homes and their jobs in things continue to improve.
According to Terry Jones, an editor from the Investor’s Business Daily, “coupled with a growing number of positive signs on the economy…consumers and investors are starting to see light and the end of the tunnel”. And this is where recovery truly begins.