Our cousins from North America are a confident lot. House prices are falling; the price of gas is staying far too high for comfort; the car industry is facing ever-deeper woes; and yet their optimism seems barely affected.
In fact, according to the latest poll from the Conference Board, US consumer confidence rose from 106.3 in April to 108 in May. It’s been higher in recent years. The index was slightly higher last December, January and February. It also scored better in March 2006. But that’s it. In the 40 months we have been monitoring this index, it has only managed a higher score four times. That’s not bad for an economy that is supposed to face a one in three chance of hitting recession later this year – at least that’s what Alan Greenspan has said.
There are two ways of looking at this. One that the index suggests our fears are misplaced; the other that US consumers are just plain irrational.
In the short-term, US confidence always seems irrational. The Americans back start-up ventures in a way that any sensible prudent London businessperson would blanch at. And yet, maybe itâ€™s the nation’s willingness to back new ventures that has been the single biggest factor underpinning its success over the last century.
Actually, if you are an immigrant, you have to be pretty optimistic and the US is, after all, built on immigration. It would appear that US consumers have crystal balls that are always half full, and other types of balls that are made of steel.
It’s this US belief in the future that has propelled the global economy forward in recent years – with US spending and borrowing propping up the rest.
Then again, this same optimism has led the country to ignore fears over global warming.
© Investment & Business News 2013