In economic recovery, what typically happens to consumer confidence?

During economic recovery, consumer confidence typically improves due to several factors that contribute to a more positive economic outlook. As the economy begins to recover from a downturn, consumers often feel more secure about their financial situations, which can lead to increased spending. This uptick in economic activity can create a cycle, where increased consumer spending leads to higher business revenues and profits, which in turn may result in businesses hiring more employees and giving raises, further boosting consumer confidence.

When consumers feel confident, they are more likely to make purchases, invest in larger items, and engage in other economic activities that can help stimulate the economy even further. Improved consumer confidence is a vital component of economic recovery, as it plays a significant role in driving demand for goods and services, ultimately supporting overall economic growth.