Personal consumption, Income & A wary stock market

Our Two Cents – Week of 4/30/12

While we’re still recovering from the Boston Bruins’ devastating playoff loss against the Washington Capitals last week, we tossed the sports pages for the business section to see how the financial markets scored.

While the U.S. economy only grew 2.2 percent in Q1 2012, there were signs that the economy thrived in the right places, including consumer spending. Personal consumption rose by 2.9 percent, exceeding expectations for a 2.3-percent rise, and up from 2.2-percent growth in Q4 2011. Personal incomes in March increased by the most in three months, as the Commerce Department said consumer income rose 0.4 percent last month. Confidence in the global economy grew substantially, according to the Q1 2012 ACCA/IMA Global Economic Conditions Survey, the largest global study of professional accountants. Thirty-two percent of respondents said they saw an uptick in U.S. business confidence, versus 18 percent in Q4 2011.

While Americans are feeling more financially confident, many are still uneasy about investing in the stock market. According to a new poll from Bankrate.com, about three-fourths of respondents said they were less inclined to investing in the stock market than they were a year ago. Perhaps it’s because of the stock market’s volatility, and they should consider methods of alternative investing. Speaking of alternative investments, hedge funds have outperformed other asset classes during the last 17 years, according to new research from KPMG and a hedge fund lobby group.

In the eurozone, Greece held talks with its international creditors about delaying by one year its medium-term deficit goals, working to ease the ongoing austerity measures on the economy. Across Europe, British Prime Minister said the continent was not “anywhere near half-way through” the economic crisis, but the German government said they’re more optimistic than Cameron about Europe’s financial stability. Cameron’s commentary came at a time when his country fell into a double-dip recession.

 


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