LEX It is going to be a long slog. The US economy only grew at 2.8 per cent in the third quarter compared with the second, rather than the original estimate of 3.5 per cent, thanks in part to weaker consumer spending. The downwards revision compounds worries that, particularly as the effect of short-term boosts such as clunkers fades, the economy is not growing strongly enough to start meaningfully generating jobs.
US households which are still over-geared are evidently prepared to take advantage of short-term government handouts. But Tuesday’s consumer confidence survey confirmed that the prevailing sentiment remains gloomy. The headline gain, notes High Frequency Economics, reverses only a quarter of October’s unexpected fall. Consumers’ assessment of their current predicament remains stuck at levels last seen in the early 1980s. And while a slight improvement in short-term outlook reflects that fewer people see further deterioration, fewer consumers, too, have any faith that business conditions are poised to get better.
