Are consumers leading a recovery for the entire economy? [UPDATE]

UPDATE: The latest reading on consumer sentiment was lower than expected at just under 67 which is a one year low. In order for consumers to be confident about the economy there will need to be new job growth and more money in people's pockets apparently.

Recent data on the economy reported that consumers had contributed more to second quarter economic growth than other GDP factors, notwithstanding the fact that the report was reported sharply lower than previously estimated. If consumer confidence should persist or even tick higher we can find ourselves smooth sailing towards a safe recovery. Otherwise, there is a chance for a double dip which would be unfavorable given the amount of pressure we are already under.

Consumer confidence

August reports a consumer sentiment of just below 67, lower than expected and lower than July's reading. July’s consumer sentiment level came out to be just under 69, which is considerably higher than the recession reading of near 55. Yet, we would need to see this index expand in the near future to be confident that that the consumer is on board with spending, ultimately leading us into economic recovery.

Definition of statistic

Since consumer spending is considered to make up two-thirds of the economy the consumer confidence indicator is highly relevant. One measure of consumer confidence is the consumer sentiment report which is polled monthly by the Since consumer spending is considered to make up two-thirds of the economy the consumer confidence indicator is highly relevant. One measure of consumer confidence is the consumer sentiment report which is polled monthly by the University of Michigan's Consumer Survey Center. There is a direct correlation to strength of consumer spending which is what makes this statistic so significant.