There’s been a lot of talk this week about a slowly improving economy, and we’ve been a party to that conversation here at BankingMyWay.com.
Tongues were especially wagging over the Federal Reserve’s decision to increase its discount rate — the rate that it charges to lend money to banks — by 0.25% (to 0.75% from 0.5%). The Fed, the economic soothsayers declared, has sent the first signal that the economy is on the mend, and it's tightening monetary policy to pave the way for larger rate increases down the road, primarily to keep inflation in check.
But did Tuesday’s pathetic — and there’s no other way to describe it — consumer sentiment number stop the economy’s glacial momentum in its tracks?
In its monthly reading of consumer confidence, the Conference Board pegged consumer sentiment at 46.5 for February — down from 56.5 in January. Just how bad is that number? The Conference Board points out that in a decent economy, its index averages about 95 points.
Clearly, the vaunted American consumer — responsible for about two-thirds of the U.S. economy — is exhausted, and has little enthusiasm for what’s coming down the pike in terms of jobs and government spending.
The consumer confidence number — and there’s a contradiction in terms — is worth mentioning in Deals of the Week. Because just when it seemed that the economy saw slivers of sunlight, consumers sent the financial markets and creditors another, more negative message yesterday.
There is some good news. As TheStreet.com’s Jim Cramer points out, businesses are beginning to get healthier, especially industrial stocks. In addition, the commercial real estate crash that economists feared hasn’t come to pass. But sooner or later, the economy will need consumers to shed their fears and anxieties and start spending again.
On that note, let’s see what kind of deals we can dig up in these conflicting economic times: