US economy gets lift from consumers, businesses
American consumers are growing more confident about the job market, companies are ordering more equipment and home prices are rising in most major cities.
The latest batch of government data suggests that the economy is improving just as the holiday shopping season begins. The only threat is a package of huge spending cuts and tax increases that will kick in unless Congress strikes a budget deal by year's end.
Rising home values, more hiring and lower gas prices pushed consumer confidence in November to the highest level in nearly five years. And steady consumer spending appears to have encouraged businesses to invest more in October after pulling back over the summer.
Those trends could boost economic growth slightly in the final three months of the year. But the real payoff could come early next year _ if the automatic tax increases and spending cuts known as the “fiscal cliff'' can be averted. Businesses that have postponed expansion plans could move forward with projects. That could lead to more hiring.
“Right now, households don't seem to be letting the fiscal threat control their urge to spend,'' said Joel Naroff, president of Naroff Economic Advisors. ``The first weekend of holiday sales was great, vehicle sales are holding up and housing is strong.''
Reports Tuesday showed:
The Conference Board's consumer confidence index rose to 73.7 in November from 73.1 in October. Both are the best readings since February 2008. The index is still below 90, the level that is consistent with a healthy economy. It last reached that point
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