In remarks made in early December 2009 about the state of the economy, Federal Reserve Chairman Ben Bernanke stated that “despite the general improvement in financial conditions, credit remains tight for many borrowers and the job market remains weak. We still have some way to go before we can be assured that the recovery will be self-sustaining.” Although his comments can clearly be interpreted as being net neutral, they did help lift global stock markets and instilled further confidence among U.S. consumers. In the context of today’s economy, net neutral is the new positive.

Recent data points on consumer confidence, consumer spending, unemployment and home sales all suggest the recession and any further large-scale deterioration in the economic markets are on their way out. The U.S. Department of Commerce reported that consumer spending rose 0.5 percent in November, representing an increase in six out of the last seven months. The strong November data however, must be viewed jointly with the September figures which posted a 0.5 percent decline. The September decline was largely attributed to reduced car sales a month after the “cash for clunkers” program ended, but did fuel concerns that the economic recovery could lose steam in the absence of government stimulus outlays. The Commerce Department also revealed that home resales surged 7.4 percent in November to the highest level in nearly three years, buoyed by consumers purchasing property before the expiration of the first-time buyer tax credit. This statistic further raised the question of whether or not consumers will continue to spend without any government assistance or incentive.