Consumer confidence has begun to rebound as recent stock market gains and better-than-expected economic data fuel hopes that the 17-month recession might be coming to an end.
The IBD/TIPP economic optimism index rose to 49.1 from 45.3 in March, its highest level since November, when Barack Obama's election victory sparked a brief spike. That's still below the 50 mark that indicates optimism, but it's 5.3 points above the 12-month average and only 2.2 points below the long-run average of 51.3.
Stronger-than-expected durable goods orders and home sales have helped drive a monthlong stock market rally, giving consumers and investors a long-awaited sense of hope. Changes to accounting rules aimed at stemming losses at big banks also helped.
First, let's not get carried away from the durable goods and home sales numbers. Both of those numbers were counter-trend and showed poor year over year performance. Right now people are looking to be more bullish so they are reading the numbers that way.
However, this does tie in with the following charts from Pollster.com
But let's remember that consumers are retrenching from extended balance sheets and have seen their net worth drop over the last 6 months. In other words, just because people are feeling better does not mean they will act on it.
