Richard Curtin. Image courtesy of D.C. Goings
ANN ARBOR-Consumer confidence remained largely unchanged from last month at its highest level in five years, according to University of Michigan economist Richard Curtin, director of the Thomson Reuters/University of Michigan Surveys of Consumers. The Surveys, conducted by the U-M Institute for Social Research (ISR), have been monitoring consumer attitudes and expectations for over 60 years. But when asked to identify any recent economic news, consumers more frequently made unfavorable references to potential changes in future federal tax and spending programs as well as the inability of the political parties to reach a timely settlement. There have only been five other surveys during the past half century in which more consumers spontaneously mentioned their uncertainty about government policies, according to Curtin. Interestingly, the past occurrences were also related to taxes, spending, and the federal deficit: Clinton's deficit reduction program in 1993 and last summer's debt ceiling debate which prompted a drop in the Sentiment Index to 55.8, the fourth lowest level recorded in the long history of the surveys. While consumers remain optimistic, that optimism is contingent on the promise of no higher taxes, except on the wealthy. "The gains in confidence ended in late November as consumers became more uncertain about when and how the fiscal cliff with be bridged," said Curtin.
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