Consumer Confidence and Consumer Spending
AbstractDespite the widespread attention given to surveys of consumer confidence, the mechanisms by which household attitudes influence the real economy are less well understood. This paper begins with an overview of how consumer confidence is measured and reported. It then evaluates the relationship between consumer attitudes and the real economy. The evidence suggests that popular survey measures contain some information about future aggregate consumer expenditure growth. However, much of that information is found in other economic and financial indicators, and the independent information provided by consumer confidence predicts a relatively modest amount of additional variation in future consumer spending.
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Bibliographic InfoArticle provided by American Economic Association in its journal Journal of Economic Perspectives.
Volume (Year): 18 (2004)
Issue (Month): 2 (Spring)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jason Bram & Sydney Ludvigson, 1998.
"Does consumer confidence forecast household expenditure? a sentiment index horse race,"
Economic Policy Review,
Federal Reserve Bank of New York, issue Jun, pages 59-78.
- Jason Bram & Sydney Ludvigson, 1997. "Does consumer confidence forecast household expenditure?: A sentiment index horse race," Research Paper 9708, Federal Reserve Bank of New York.
- Mankiw, N. Gregory, 1982. "Hall's consumption hypothesis and durable goods," Journal of Monetary Economics, Elsevier, vol. 10(3), pages 417-425.
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