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.
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