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Wednesday, 21 November, 2001, 16:57 GMT
US consumers regain confidence
Shoppers in Toys R Us, New York
US consumers are heading back to the shops
US consumers are regaining the confidence that was lost after the 11 September terrorist attacks, according to the latest data.

The revival has renewed hopes that the US will quickly be able to pull itself out of its current economic slump.

The University of Michigan's closely-watched consumer sentiment survey rose in November for a second month in a row.

The index hit 83.9, up from 82.7 last month.

The figure was higher than market watchers had been expecting, and helped stem the early losses suffered on the US stock markets.

Stuck in a rut

But the index is still dwindling far below the peak of 112 reached early last year.

The index has been stuck in a clear downward trend over the last 18 months, as fears over the health of the US economy caused consumers to become more hesitant.

The strength of consumer sentiment - and the willingness of shoppers to splash out on new goods - is one of the key factors that keeps economies ticking over.

The Federal Reserve, the US central bank, has significantly reduced interest rates this year, encouraging Americans to spend rather than save.

Interest rate action

The Fed has so far cut interest rates 10 times this year to 2%.

Some economists have credited the revival consumer sentiment on these reductions.

And there was further encouraging news from the Department of Labor's weekly job figures.

The number of new people filing new claims for unemployment benefits fell last week to 427,000 people - the lowest level since the terror attacks.

US unemployment has now fallen for four weeks in a row, raising hopes that the US has already suffered the worst of its economic troubles.

Terror's impact

Signs of a slowdown

Rate cuts


Key players

See also:

14 Nov 01 | Northern Ireland
Jobless figures rise as economy slows
07 Nov 01 | Business
US consumers continue to borrow
26 Oct 01 | Business
US consumers remain wary
25 Sep 01 | Business
Why consumer confidence matters
12 Jun 01 | Business
Worrying times for US homeowners
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