MORGAN STANLEY: THE WAIT IS OVER - American Households Are Finally Feeling The Recovery

Morgan Stanley economist Ellen Zentner says American households finally "feel" the recovery.

"For four long years since [July 2009], U.S. households have asked themselves, 'what recovery?'" writes Zentner in a note to clients. "To view the recovery through the lens of America's households, we look at the behavior of the Conference Board's monthly consumer confidence index over the business cycle. What we find is that only in the past three months has consumer confidence in the U.S. finally reached a level considered historically 'normal' in recovery."

Zentner expands a bit in the note, titled "Households Finally 'Feel' the Recovery":

Exhibit 1 charts consumer confidence over the business cycle. Confidence plummeted to a new historical low of 25.3 in February 2009. Prior to the financial crisis, the low had been 43.2 in December 1974 (the data series began as a bi-monthly survey in February 1967). It has taken 4 1/2 years for confidence to reach a level around 80, which has been the average level in past recoveries (Exhibit 2). Essentially, U.S. households are telling us that it has taken more than four years for the recovery to feel like a recovery.

Average consumer confidence levels in economic recoveries are shown below.