Consumer confidence rises more than expected

Regardless of the improvement, consumers still have it rough and aren’t finding any reasons to increase their spending, a key component in the nation’s economic recovery. 

Stagnant wages, incomes dropped last month, lack of job creation and volatile stock markets have frozen consumers into a state of uncertainty. 

The Commerce Department reported Friday that personal spending slowed in August and incomes declined for the first time in almost two years.

Household purchases climbed 0.2 percent after a 0.7 percent July increase. Incomes dropped 0.1 percent.

On a positive note, business activity was up in September, providing a possible signal that there’s an expectation the economy will improve through the remainder of the year. 

The Michigan report’s index of current conditions, which reflects whether consumers think it is a good time to buy big- ticket items such as cars, increased to 74.9 from 68.7 in August. 

The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, rose to 49.4 this month from 47.4 in August.

President Obama is proposing a $447 billion jobs plan that has gotten mixed reviews from Democrats and Republicans on Capitol Hill. 

On top of that, the Federal Reserve recently announced a program to shift $400 billion of short-term debt to longer-term Treasuries, aiming to keep interest rates down and provide a boost to the economy.