Is Optimism About the Economy Returning?

As always with the economy, the verdict is constantly changing. But the latest verdict, as April draws to a close, is that optimism about the economy may be returning on a number of levels. Sure, unemployment is still up. But other commonly accepted indicators of sentiment are showing some signs of improvement.

Consumer sentiment

Consumers are considered Very Important to the way our economy works. After all, consumer spending accounts for 2/3 of our economic activity. Therefore, it is not surprising that measures of consumer confidence play a big role in optimism about the economy. And for April, there are definite signs that consumer confidence is returning -- and as a result they're spending more than they have in the past few months. Part of the reason that consumers are feeling confident enough to start buying things again probably has to do with all the great deals they can get. With prices low -- in response to the economy -- now is looking like a good time to go out and buy a few things while they are on sale.

Investor sentiment

Investors are also starting to feel better about the economy. This is evidenced by the fact that the Dow is back solidly above 8,000, and by the fact that the stock market in general (here and around the world) continues to rally. There are very real hopes that businesses -- many of which saw a profitable Quarter 1 -- will soon be on much more stable footing.

While the recession will probably still be with us for some time, there is no longer the same kind of feeling that we're sinking inexorably toward a Depression. Economic recovery is expected sometime in the next year or two, and that has many people feeling more optimistic about where the economy is headed, and what is happening with their own finances.

Are you feeling optimistic about the economy?