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MONEY ANXIETY INDEX REPORTS THIS IS NOT THE GREAT RECESSION 2.0
Mar. 20, 2020
Source: Analyticom LLC news release
San Francisco, CA - Consumers are much more confident this time around. The February Money Anxiety Index is near record low at 40.9, and the preliminary February University of Michigan Consumer sentiment Index rose to a high of100.9 in February. These two indices, which are invers (Low money anxiety equals high consumer confidence), show that consumers are holding on to their confidence longer.
Prior to the Great Recession, the Money Anxiety Index started increasing 14 months prior to the recession, and the University of Michigan Consumer Sentiment Index started declining about a year before the official recession of 2008/9. Granted, the March Money Anxiety Index will go up and the University of Michigan Consumer Sentiment Index will go down, but still, consumers are exhibiting greater resiliency this time around.
Consumers are more confident this time around because they know that we are facing a temporary healthcare crisis rather than an underling economic problem. This time around there is no systemic issues, and the economy is fundamentally hearty. The fact that consumers exhibited high confidence all the way to February indicates that we can expect them to bounce back as soon as the healthcare crisis is over.
"The reason the stock market declined so much in the last couple of weeks is because many traders acted impulsively rather than analytically," said Dr. Geller President of Analyticom and the developer of the Money Anxiety Index. "Those who sold in panic will end up being the biggest losers once the market bounces back - and it always does."
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