Debt Consolidation USA Explains How Consumer Confidence Affects The Economy

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Debt Consolidation USA shares how consumer confidence can have serious effects on a consumer driven US economy.

the US is a consumer driven economy

Debt Consolidation USA shared in an article published last May 30, 2014 how consumer confidence has a direct effect on the US economy. The article titled “Tips When Economic Confidence is Down” explains how one affects the other and shares tips on how to ride out a low confidence on the economy.

The article starts off by showing how a recent survey reflects that consumer confidence on the economy is down. A lot of consumers are not too positive on their forecast on how the economy will turn out in the immediate future. This low confidence level can directly affect how the economy may turn out.

The reason for this is because the US is a consumer driven economy. About 70% of it is dependent on consumer behavior. The more people purchase and buy, the better the economy is. The less consumption, the lower the economic performance will be. This is the reason why consumer confidence is important in the actual performance of the economy.

This could mean that consumers can cut down on spending and hold on to their money until their confidence level goes back up. The article explains that there are two possible scenarios when this behavior translates to a shaky economy.

The first one is that consumers will be reluctant in making more purchases and hold off until confidence level is up. This can have a negative effect on the economy and can trigger a snowball effect of low confidence turning into an actual economic problem. The second scenario is that consumers will be forced to make smarter and better spending choices.

The article explains that the second scenario is a better reaction from consumers. It does not totally stop spending but presents an opportunity to be more responsible before making purchases. This is a better consumer reaction considering that the economy is consumer driven and any dip in spending could have adverse effects on the economy.

The article also shares some tips on how to protect personal wealth. It goes on to explain how an emergency fund is an important factor in making sure consumers are protected from unexpected financial needs. Sticking to a budget and relying on various sources of income will also help protect consumer funds.

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Adam Tijerina
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