Our Two Cents – Week of 1/30/12
As January flips to February this week, U.S. economic optimism continues prevailing, while Europe strides toward economic reform.
Focusing on the economy, President Barack Obama delivered his State of the Union address, outlining a path to constructing “an economy built to last.” On the heels of the president’s speech, The Wall Street Journal and NBC released a poll showing that Americans view the economy a bit brighter. According to results, 37 percent of respondents said the economy will get better in the next 12 months. One sign of economic restoration is consumer confidence. The U.S. Consumer Confidence Index climbed to 75 from 69.9 at the end of December—the highest level in almost a year. Experts said an improving jobs market and higher stock prices helped fuel the increase. Additionally, about two-thirds of economists who participated in the National Association for Business Economic survey believe the nation’s gross domestic product will bump to a rate of more than 2 percent. The week ended with the economy growing at an annual pace of nearly 3 percent in Q4 of 2011.
While the U.S. received economic assurance, Europe remained focus on its fiscal matters. At the Jan. 30 summit, European Union leaders agreed to a permanent rescue fund for the euro zone. Leaders will sign a treaty establishing the European Stability Mechanism (ESM), “a 500-billion-euro permanent bailout fund that is due to become operational in July, a year earlier than first planned.” Summit participants also discussed ways to create more job opportunities and financial growth. Aside from the treaty, Spain still faces recession as tourism is expected to remain low in the winter. Factors such as austerity measures and higher taxes also might bruise the country.
- EU leaders to agree on permanent bailout fund, balanced budget, Reuters, Jan. 30, 2012
- European Cliff Hanger – Spain, Forex Crunch, Jan. 30, 2012
- U.S. Michigan Consumer Sentiment Rises, Bloomberg, Jan. 27, 2012
- US Economy Grew by 2.8% in Q4 2011 – Dollar Rises, Forex Crunch, Jan. 27, 2012
- WSJ/NBC Poll: A (Bit) Brighter View of the Economy, Wall Street Journal, Jan. 26, 2012
- Obama outlines path to ‘an economy built to last’, USA Today, Jan. 25, 2012
- Survey: Economists see modest pickup in growth for 2012, little change in job market, Associated Press, Jan. 23, 2012
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