Trends

 

05 27 2014

05 27 2014

Consumer Sentiment Takes Unexpected May Dip

After reaching a nine month high in April, consumer confidence took an unexpected slide during May, as elevated commodity costs affected spending.

The Thompson Reuters/University of Michigan Preliminary Sentiment Index dropped from an April reading of 84.1 to 81.8 in May, as rising food and fuel prices evidently offset the marked employment sector gains seen over the past two months. The dropoff was particularly surprising after the April index appeared to represent a return to normalcy following months of harsh winter weather that stifled consumer spending. Bloomberg reported that surveyed economists had projected a median reading of 84.5, which would have represented a moderate improvement.

Construction rates – one of the areas most hamstrung by the prolonged first quarter freeze – picked up in April, prompting hope that home sales activity might be rejuvenated. But still tight standards for mortgage credit approval and the looming inventory issues have prevented the spring purchase acceleration many economists were hoping to see. The rate of housing starts – usually a solid indicator for future supply and prospective sales – does offer reason for optimism, having increased by 13.2 percent through April, according to data from the Commerce Department.

Most analysts simply believe that the hesitance from consumers is a function of the winter’s lingering effects, and that with more sustained labor expansion and wage gains, confidence and activity will pick back up.

“We’re seeing some payback from that big jump that we saw in April,” Terry Sheehan, a New Jersey based economic analyst, told Bloomberg. “The labor market is improving, the economy is doing better in the second quarter, and confidence should start to build back slowly.”

When consumer sentiment returns to consistent health, as expected, businesses of all sizes could experience greater demand. In the interest of efficiently fielding those new opportunities, smaller and mid-sized firms should explore the equipment leasing options offered by companies such as National Funding.

Featured


  • Essential business development tactics

    3 Effective Business Development Tactics for Small Businesses

    Ultimately, every small business wants to grow and develop. However, owners need to pick spots and choose to develop their operations in a way that is sustainable and beneficial in the long run. Growing simply to expand the business's footprint doesn't always make sense from a financial or operational standpoint. How can your business increase… […]

  • Encourage employee volunteerism

    4 Ways Companies Can Benefit From Social Responsibility

    Companies are taking corporate social responsibility more seriously than ever. According to The Guardian, more than 5,000 corporations release their environmental, social and corporate governance performance on an annual basis. And, nowadays, it's not hard to find an initiative designed to attract socially​ minded companies. The Guardian explained that today's trends in social responsibility are a… […]

  • Press Release

    Port of San Diego Holiday Bowl Parade Presented by National Funding

    Port of San Diego Holiday Bowl Parade Presented by National Funding Set for Dec. 28 on Harbor Drive SAN DIEGO (December 21, 2017) – America’s Largest Balloon Parade – the Port of San Diego Holiday Bowl Parade presented by National Funding – will take place Thursday, Dec. 28 on Harbor Drive along the North Embarcadero… […]

  • Inventory loans for small businesses

    Inventory Financing – 4 Tips To Help You Get The Most From Your Loan

    Every business that sells products must have inventory. Without it, you simply won't make a profit. However, figuring out your inventory needs can be a challenge. You want to have enough so that you never need to tell a potential customer that you're out of stock - these people could wind up visiting or buying… […]