Why How Consumers Feel About the Economy Matters
One of the more interesting economic reports released each month is the University of Michigan Consumer Sentiment Survey. Unlike inflation or jobs reports, this survey focuses less on hard economic data and more on something very human:
How people actually feel about the economy and their own financial situation.
Economist Justin Wolfers does an excellent job explaining economic topics in a way that feels understandable and connected to everyday life. Since the University of Michigan Consumer Sentiment Survey focuses heavily on consumer psychology and confidence, I thought this earlier discussion was worth sharing before the newest report is released tomorrow.
Video Update
I plan to update this post tomorrow with Justin Wolfers’ latest reaction and analysis once the new University of Michigan Consumer Sentiment report is released.
Personally, I find this report especially interesting because confidence and financial comfort influence everyday decisions far more than many people realize.
Lately I’ve become less optimistic about finding the kind of flexible part-time work opportunities I was seeing before COVID. Employers appear more focused on full-time hiring, while many openings receive significant competition from applicants.
Willie and I had developed a good routine together around flexible work opportunities, and those kinds of positions now seem harder to find today.
That uncertainty naturally affects spending confidence as well. When job opportunities feel harder to find, rising prices feel heavier and discretionary spending becomes easier to postpone.
The Consumer Sentiment Survey attempts to measure those kinds of feelings across the country:
- optimism
- caution
- stress
- confidence
- uncertainty
Tomorrow’s report should provide another interesting look at how Americans currently feel about inflation, jobs, finances, and the overall economy.
Helpful Links
University of Michigan Surveys of Consumers
https://data.sca.isr.umich.edu/
Bureau of Labor Statistics (BLS)
https://www.bls.gov/
Federal Reserve Economic Data (FRED)
https://fred.stlouisfed.org/
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