Economy to expand marginally

While the U.S. economy should expand in the months ahead, lagging consumer confidence will prevent it from growing significantly, according to a new report released by TD Bank.

The primary sources of the problem are a sputtering housing market and persistently high unemployment levels. Also stymieing growth is global economic uncertainty, according to the study's lead author and TD chief economist Craig Alexander.

"Financial markets suffered a crisis of confidence this summer, the fallout from which will impact the economic recovery," said Alexander. "A more robust pace of economic growth will require tackling the legacy issues of the financial crisis still burdening the recovery."

He added that because home prices have fallen precipitously, equity has weakened, limiting some consumers' access to credit. Alexander projects spending and credit growth will remain low until home prices stabilize.

Economists largely agree that a significant percentage of the economy relies on consumer spending. By paying off loans and bills on time, consumers will be able to borrow at a low rate of interest. Should consumers be irresponsible with their payments, however, their rates may rise due to bad credit. Fewer purchases because of the higher interest charges may result.