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America is in its best mood since the crisis, i.e., mildly depressed

The world's largest American flag to hang in a department store at Macy's on State Street was used as the backdrop for the bicentennial celebration of the national anthem, on Flag Day Saturday, June 14, 2014 in Chicago, IL. The tradition started in 1916 and was resurrected in 2003 which Macy's proudly continues. Macy's invited Chicagoans to join in the singing of the Star Spangled Banner as part of the Smithsonian Institute's "Raise It Up" Campaign. (John Konstantaras/AP Images for Macy’s Inc.)
AP Images/Macy’s
Old Glory once again flies proudly at the mall.
By Matt Phillips
Published Last updated This article is more than 2 years old.

Happy days might not be here again, but they seem within sight.

The Conference Board’s gauge of US consumer sentiment reached 92.4 in August. That’s the highest reading since the financial crisis, and the best since late 2007.

Of course, you’d have to be blind not to notice that US consumer sentiment remains depressed when compared with the years that preceded the Great Recession. In fact, readings in the high 80s and low 90s are about where the US was back in early 2003, amid the beginning of the US war in Iraq (not exactly a buoyant time for the US populace).

Still, the fundamentals of the US economy have strengthened significantly. The economy is producing some of best new jobs numbers since the 1990s. The unemployment rate, even long-term unemployment, has fallen sharply. House prices are up about 8% year-on-year. Auto sales are surging. Interest rates remain low. And oil prices remain stable, despite the horrors of Iraq.

Most recently, the stock market has started climbing once again, a factor that tends to have a positive feedback loop with consumer confidence. (Over the last couple days, the S&P 500 cracked 2,000 for the first time.)


Of course, there are plenty of reasons for gloom if one looks outside the borders of the US. Much of Europe is mired in depression. China seems to be desperately trying to stave off a slowdown. And the conflicts in Iraq and Syria seem more out of control than ever. But for now, Americans seem to be looking inward. (And given the state of the world, one can’t really fault them.)

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