| Economy Credit Trouble People |
| By Credit Federal |
Published
12/7/2007
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Financial News
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Credit Crisis Further Troubles Economy
Consumer confidence hugs a 2 year low as housing troubles, a credit crisis, high energy costs and problems on Wall Street continue to make people worry about the economy and their personal finances.
Economists claim a host of factors are the cause for people's poor outlook, including the collapse of the housing market which lowered home values and subsequently made homeowners feel less wealthy. Home foreclosures are at record highs, and credit has become harder to get approved for making it even more difficult for people; particular those with bad credit, to buy high cost items such as a new home. Meanwhile, high fuel costs are draining people's pockets. Then there's Wall Street, causing investors to fret over their nest eggs and hindering their further investments.
The Federal Reserve; meanwhile, is monitoring how people spend and invest, to see if they cut back sharply which could slide the economy into a recession. To thwart a possible recession, the Fed has sliced a key interest rate twice this year. A third rate reduction is expected when policymakers meet next week.
Economists watch how willing people are to spend, which gives them clues as to their confidence level. One noteworthy area is how people feel about and take action with investing as well as large ticket purchases. Another area is how people feel about employment conditions.
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