The U.S. consumer is back. Well, maybe....

Summary
It’s been a hard couple of years, but the U.S consumers have started their recovery. The home sales have increased by 10% in September, for a second time in a row from the end of the tax credit during the summer. Therefore, the housing market is starting to equate.
As for the retailing stores, the sales have become much stronger than what they thought in September, with the U.S government releasing the spending that occurred within the last two months. Now as the fourth-quarter rolls around, consumers are beginning to advance their spending. A director of global economic research at Alliance Bernstein LP stated, “I think retail sales are going to be a little better than expected [during the holiday season].” “Consumers’ fundamentals are better, and I think their pace of spending will pick up over time.”
On the other hand, there have been many declining areas such has credit, debt and confidence. The consumer credit has fallen almost each month since last summer 2008. The debt payments of disposable income also dropped to 12.1%. This was the lowest it has ever dropped in the last 10 years. Lastly, consumer confidence has decreased this month to a 67.9%. “We’re definitely more concentrated in discretionary, and we definitely think the consumer is coming back,” said Andrew Pink from Thornmark Asset Management Inc. He also said, “Our thoughts are that we’re going to see a continued recovery, and it is going to be driven by consumer demand and spending.”
The purchases have increased 2.2% and there seems to be more good news when the third-quarter data is released by the Commerce Department on Friday. However, Paul Dales, an economist, advises that with the unemployment rate still near 10%, and the U.S consumer seems very high, the interferences to stronger consumer spending are considerable.

Connection
I think the factor of expectations of future incomes from demand is linked to this article because now that consumers are starting to think that they are going to get more of an income, they’re starting to spend more. Another factor from demand is incomes. As U.S consumers are on the verge to recovery, they are receiving more of an income. This allows them to spend more money. Before they didn’t have much money, so they’re spending was limited. Although there aren’t any numbers to prove that the housing market is elastic, I believe, speaking in absolute, which consumers weren’t buying houses before because the prices were so high. This shows that housing is elastic because housing takes up a very high number in the percentage of the budget.

Reflection
In my opinion I think that the U.S is trying to recover, but lets face it. It’s going to take a lot of spending and time. Consumer’s incomes would have to start to increase, which means they’re going to needs jobs or they’re going to need more hours from their jobs. Although the recession is starting to sizzle down, it’s going to take some hard spending by many consumers for this recovery. Moreover, I agree with Paul Dales because unemployment is a very strong issue and concern that many people are going through. Also, I believe the housing market is starting to stabilize because I’ve heard my father and uncle discuss the issues with housing in the U.S and here in Canada