Two pieces of data released today show some improvement in the current state of things.
The Reuters/University of Michigan final index of consumer sentiment has risen to 65.1 from 57.3 in March, the biggest gain in more than 2 years. Whether this is a result of the stimulus package and other programs implemented by the government, the improvement may easily be attributed to lower mortgage rates, cheaper gasoline, and rallying stock prices. Even the lower prices from retailers may have helped.
Another improvement comes from Institute’s Supply Management (ISM) factory index for manufacturing, which from a reading of 36.3 in March went up to 40.1, a change that shows the cut in production has slowed down. Anything that is below 50 shows a contraction.
Expectations measured, believed to be a better gauge of consumer spending, have also improved. It shows a better 63.1, some 10 points higher from the 53.5 reported in March. Bloomberg adds: A measure of current conditions, which reflects Americans’ perceptions of their financial situation and whether it’s a good time to buy expensive items such as cars, increased to 68.3 from 63.3.
Using a report by Adam York from Wachovia’s Economics Group a couple of days ago on consumer confidence, the worst may be over for us.