Consumers Feeling OK

Consumers are feeling OK.  Not exuberant, but not down-in-the-dumps either.

In looking at the two major consumer attitudes surveys, ignore which line is higher.  Simply compare recent index levels with past levels for the same index.  Conclusion: attitudes are improving.

Economists are trained to be skeptical of survey data; "watch what they do, not what they say" we hear over and over again in grad school.  But the survey data come out sooner than transactions data, and it offers a different slant on the issue.

One key point: it confirms the improved attitudes that we see in the job quit rate data.

Business Strategy Implications: Many of us economists are becoming a bit more optimistic about 2007.  If you were capacity constrained last year, give some thought to whether you’ll be able to meet demand this year if growth is fairly good.