(NEW YORK) — With all the market euphoria, a rally in the housing market, plus gains for auto sales, it may be surprising that U.S. consumers are still very cautious about spending money.
A government survey released late last week showed the savings rate rose in December.
Phil Orlando, chief equities strategist at Federated Investors, tells ABC News Radio, “If consumers and businesses were extraordinarily confident they would be going out and spending and bringing that savings rate down.”
Gridlock in Congress may be one reason why consumers and businesses remain so cautious.
“I think what’s been going on in Washington is an economic chilling effect,” says Orlando. “People just don’t know what to make of it and to some degree some businesses and consumers may have just held back a little bit.”
Despite recent gains, consumer confidence remains well below its historical average.
Copyright 2013 ABC News Radio
Madison Park, Keith Allen and Andreas Preuss, CNN