Consumer Alert: Confidence is up and interest rates are low. Now may be the time for that big purchase.
ROCHESTER, N.Y. (WHEC) — Your consumer alert is taking a look at you and how you’re feeling about the economy. And according to the numbers, you’re feeling pretty good. The consumer confidence index is out and up—way up from last month. In March the index was 109. April’s number is almost 122.
Most of that jump is an indication of how consumers are feeling right now. The present situation index jumped from 110 to almost 140.
Consumers are optimistic about the number of shots given, the businesses opening up and your own financial standing. The fact that most of you got a stimulus check helps fuel that optimism.
But when we look at the percentage of consumers who believe the economy will substantially improve over the next six months, only 40.5% of consumers have a rosy outlook. That’s up only 0.2% over last month.
That brings us to today’s meeting of The Federal Reserve. The Fed certainly considers how we, as consumers, feel about the economy.
It’s also looking at the CPI, Consumer Price Index. Remember a couple of weeks ago I told you prices are on the rise. Everything from your trip to the grocery store to the gas station is more expensive.
So the big question Wednesday was the following: Would the Fed raise interest rates? The answer is no. Wednesday afternoon The Federal Reserve decided to keep short-term interest rates near zero.
Yes, we are seeing inflation and a stronger economy, but the Fed wants to see sustained job growth before moving the interest rate needle.
Here’s what that Fed policy means for you and me. We have more access to easy money. Cash in the banking system goes up; interest rates go down, and lenders loan more. Even mortgage rates remain around 3%, a historic low. So if you’re looking for another house, a new roof for the one you have, or a new car to replace that old clunker, the fed hopes these interest rates encourage you to make the leap.
And here’s more good news on the consumer front. Fed Chair Jerome Powell told 60 Minutes it’s very unlikely the fed will raise interest rates this year.
So with that information, we, as consumers, can plan. We can all take a look at our needs, our budgets, and the cost to borrow money.
My hope is that this information helps you make an informed decision about that next big buy. And that’s your consumer alert.