Economists have been saying for a while that the Great Recession has ended. Now, there are signs that the general public is finally starting to agree.
Though still pitifully low, consumer confidence is improving.
But some of the positive economic news of recent weeks, like the best job gains in three years, the continued stock market rally and early signs of a turnaround in home values, is starting to make people more hopeful.
It’s a growing optimism that can best be seen in consumers’ actions, not their answers to various polls.
“If you look at what they’re saying, they’re still very nervous,” said Mark Zandi, chief economist at Moody’s Economy.com. “But if you look at what they’re doing, they’re more convinced that things have turned the corner.”
Consumer spending is improving at a faster pace than many had expected at this stage in the recovery.
The savings rate, which soared last year when people were afraid they’d lose their jobs and homes, has started to decline.
“That’s an indication of increased confidence,” said Keith Hembre, chief economist at First American Funds.
And home prices appear to be stabilizing too. With three quarters of month-over-month gains, according to S&P/Case-Shiller. Although prices lower than they were a year ago, the free fall seems to have ended.
“I think people are coming to the conclusion the worst is pretty close to over in the housing market,” said Zandi.
A key retail sales report on Thursday is expected to show that chain-store sales grew at a 6% rate in March. That would be the best increase in three years.
And auto sales are also improving, with almost all automakers posting double-digit percentage gains in March.