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U.S. consumer confidence sentiment index rises in September

The 2012 November elections have influenced public sentiment in numerous areas

The 2012 November elections have influenced public sentiment in numerous areas, but the confidence expressed by U.S. consumers in a recent sentiment index showed that Americans are becoming less pessimistic about the economy.

According to Bloomberg News, the Thomson Reuters/University of

The 2012 November elections have influenced public sentiment in numerous areas, but the confidence expressed by U.S. consumers in a recent sentiment index showed that Americans are becoming less pessimistic about the economy.

According to Bloomberg News, the Thomson Reuters/University of Michigan final sentiment index rose to 78.3 in September, an increase of 4 points from the previous month.

The increase in positivity among American consumers came as news of rising property values, higher stock prices and a stabilization of the price of gasoline combined to lift sentiment in the country. Though this rise occurred, unemployment still hovered above the 8 percent mark and stagnant incomes remained a restraint for households across the country.

Since consumer spending currently makes up about 70 percent of the economy, the sentiment of Americans related to their expenditures is extremely important.

"The wealth effect created by rising home prices can lift consumer spending on other big ticket items," Steven Ricchiuto, chief economist at Mizuho Securities USA Inc., said in a research note on Sept. 25. "Households believe that the economy is getting better and will continue to do so."

While the overall picture did not get much brighter for Americans, the improved housing market was a main influence on the sentiment of consumers.

According to the news outlet, this improved outlook for real estate and rising stock prices was enough to tip the scales in favor of a rise in sentiment.

"It’s probably the equity market in particular, that people are feeling a little better about things than they were three months ago," Jim O’Sullivan, chief U.S. economist for High Frequency Economics Ltd. in Valhalla, New York, told Bloomberg. "It’s encouraging from the perspective that at least we’re not weakening. If anything, I think the numbers are going to look a little better over the next month or two."

Slate Magazine reported that despite the increase in the sentiment index, chief financial officers in the U.S. were no more confident than they had been previously.

According to the news outlet, a Deloitte survey noted that fiscal uncertainty was prevalent among these execs, leading to a delay in hiring and stagnation in the payrolls of major companies. Consumers may remain more confident than these business leaders, but this is also reliant on global economic factors. 

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