Consumer and Investor Sentiment Rises to Pre-Crisis Levels
Americans are feeling a lot better about the U.S. economy this week, according to a pair of indices tracked by Rasmussen. Investors are very bullish on the recovery. Separately, consumer sentiment has also risen. Both indices are at their highest level since early September 2008 -- prior to the climax of the financial crisis.
The first statistic, the Rasmussen Investor Index, measures the daily economic confidence of investors. It rose on Thursday to 103.2, its highest level since early September 2008. It was as low as 52.5 in 2009, but reached 150.9 in 2004.
Rasmussen's Consumer Index increased to 86.3 today. This is also the highest it has been since September 2008. It fell to 54.7 in 2009 and peaked at 127 in 2004. While it's hard to strictly compare these two indices, investors' confidence appears to be relatively higher than consumers' sentiment. Given how much better the stock market has done than the broader economy, this makes sense.
This news is important because it shows that investors and consumers have psychologically moved beyond the crisis. Sentiment is a very important indicator in economics: it reveals how much money consumers are willing to spend and the amount of cash investors are willing to put into the market. Both actions are necessary for things to improve. So barring additional unforeseen negative economic developments, this trend is another sign that the recovery is underway.