Monday, December 10, 2012

Two Paths for Confidence

Consumer confidence has been running pretty strongly lately: In November, the benchmark consumer confidence index as measured by the Conference Board reached a nearly five-year high. Consumers haven't felt this good about the economy since February 2008, or just three months into the recession.

Oddly enough, though, these feelings aren't shared by the nation's CEOs. In the latest survey of the nation's chief executives conducted by the Business Roundtable, their confidence has sunk to its lowest in three years.

What explains the discrepancy? Most people think that business owners fear the onset of the Fiscal Cliff, which would saddle the nation with higher tax rates and drastic spending cuts come the first of the year. The CEOs fear this could send the economy back into recession; general consumers either disagree about the outcome, or aren't aware of what the consequences might be.

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