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Editorial: Caution marks recovery

Even as the economy continues to improve, data out this week suggests that consumers are paying close attention to their wallets, and are being more cautious about spending money.

According to the Associated Press, U.S. home prices rose 8.1 percent in January. That was the fastest annual rate since the peak of the housing boom in the summer of 2006. Demand for longer-lasting factory goods also saw its biggest increase in five months, jumping 5.7 percent in February.

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Manufacturing and factory production also was up in February, according to The Associated Press.

At the same time, the monthly stats on the Consumer Confidence Index compiled by The Conference Board showed a drop, from 68 in February to 59.7 this month, indicating that consumers aren't entirely confident that the economy will continue to improve.

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Higher gas prices were likely partly to blame for the drop. Increases in costs for goods, along with fears over the impact of government cuts are helping to prompt consumers to keep a closer watch on their finances.

That's a different mentality from the years prior to the housing bubble busting, when rising values contributed to more people overextending themselves.

Today, the gains in the housing market are good news for people who suffered big losses in the recession. And as the gains in the housing market continue, that will continue to feed additional gains as more people begin looking to purchase homes in the busy summer months.

In short, all signs point to a continuing recovery, even if the federal government cuts do mean those gains are smaller than they might otherwise have been. Additionally, as the Consumer Confidence Index seems to indicate, people are moving cautiously when it comes to spending money, and they are being careful not to accumulate the massive debt that many had prior to the recession. Combined, this should translate into a more solid recovery where more people are spending, but doing so within their means.

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