Actual consumer sentiment difficult to measure
Jeremy Hobson: In a few hours, we’ll get a look at how we consumers are feeling about the economy and how willing we are to spend money. The data will come from the Thomson Reuters/ University of Michigan Survey, which is closely watched by economists.
But as Marketplace’s Jennifer Collins reports, it can be hard to put numbers on a feeling.
Jennifer Collins: Economists like Chris Christopher of IHS Global Insight use words like sentiment and confidence to measure something that’s pretty hard to measure.
Chris Christopher: When you talk about confidence, it’s somewhat of a mystical thing.
Like a fortune teller, Christopher predicts what the sentiment numbers will be and then use those to predict what retail sales figures that follow. And he’s been doing it for years. He says small swings in confidence mean little.
Christopher: But large swings downward or upward like we saw over the summer, tell you that something’s gonna give.
Doug Bachtel: Look there’s lies, there’s damn lies and there’s economic data, OK?
Doug Bachtel is a demographer with the University of Georgia. He says the numbers out today are based on a relatively small sample, around 500 telephone surveys. Then there’s the way they’re interpreted.
Bachtel: One person from one school could view the economy going one way and another person from another theoretical approach could view it in an opposite direction.
But today, economist Chris Christopher says sentiment should be up a bit.
I’m Jennifer Collins for Marketplace.
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