Consumer sentiment under the holiday microscope

Scott Tong Nov 13, 2015
HTML EMBED:
COPY

Consumer sentiment under the holiday microscope

Scott Tong Nov 13, 2015
HTML EMBED:
COPY

We get the latest snapshot of consumer sentiment, in the critical run-up to the holiday season of consuming. The index in the last few months has been rather healthy.

Are you better off financially than last year? How’s does next year look? Is it a good time for a big purchase?

These are the economic psychology questions the University of Michigan asks people to tally consumer sentiment. The index is up 3.6 percent over last year, and has generally risen for four straight years.

For many economists, the index predicts the behavior of consumers.

“They are not going hog wild,” said Gus Faucher, senior economist at PNC Bank. “But they are feeling a little bit more comfortable. They are a little bit more willing to spend on big ticket items, on luxury items.”

But Jeff Dominitz at Resolution Economics doesn’t pay attention to the consumer sentiment metric at all. The index goes back to 1952, and the survey ever since has asked whether it’s a good time to buy a stove. Or a refrigerator.

“I don’t think now when we talk about major household items 60 some odd years later that those would be the first things to come to mind,” Dominitz said.

A question about buying a new laptop for the holidays would be more current, he said.  

 

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.