Why Consumer Confidence Is Key to Fighting Inflation | WSJ

Consumer confidence, sentiment, expectations… Whatever you call it, the measurement of how consumers are feeling about the economy is being closely watched by the Federal Reserve.

Why? Because consumer confidence can be a self-fulfilling prophecy: If enough people think inflation is going to get worse, it likely will get worse.

WSJ looks at how the two main measurements — the consumer-sentiment index and the consumer-confidence index — are calculated, and why Federal Reserve Chairman Jerome Powell has to not only bring down inflation, he has to make the public confident that he will.

Illustration: Adele Morgan

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#ConsumerConfidence #Inflation #WSJ

[DonaldMark-nese]

Nobody can become financially successful overnight. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking bold steps we need in other to reach our goals. you have to contend with inflation, recession, decisions from the Feds and all. I was able to increase my portfolio by $289k in months. You have to seek for help in the right places.

[NotyourBusiness-urto]

Market breadth is still weak, but leading stocks did well, with more clearing buy points or setting up. I find myself at a crossroads, uncertain whether to liquidate my $150, 000 stock portfolio. I'm seeking advice on the best strategy to capitalize on this current market.

[nycto]

Psychology and Economics two of my favorite fields to study! I'm studying business which has both...

[djsmithe]

To me, this has always been obvious.
Happy people spend money, worried people don't.
When people spend money, the GDP goes up. When people don't spend money, the GDP goes down.
Here's the problem. People get too happy and spend a lot of money. Then the money runs out and they get worried.

[myrandacollins]

with the infation that seems here to stay coupons are the best solution in many respects!

[FinancialShinanigan]

You mean "consumers need to be confident getting more into debt"

[joeysmit]

Hey WSJ, do you have data about how many hours of pay of the average workweek goes to general expensese (like housing, food, gas etc.). 60 years ago, a 1 income (40 hours per week) could support a family with everything they needed. Since then the average hours worked per household has been increasing steadily, up to the point where both adults have to work 40 hours per week.

Is there something of a relationship between the price of necessary expenses (like I stated above) and the amount of hours worked per household? Perhaps a % of total income that remains steady or increases, meaning that it doesn't matter how many hours you work, extra time in your job will not result in extra luxuries.

[jhonprice]

Given the high inflation that has led to the reduction in consumer purchasing power, CPGs are looking for new ways to attract customers. I think the arrival of digital coupons and the transition to 8112 was accelerated by this. Fobi able to increase customer loyalty by issuing digital coupons through Qples This would be very useful for big brands to increase, not only the ROi, but the possibility of attracting customers based on promotions aimed at them! I think it is revolutionary!. Being a data first company, it is very disruptive and at the forefront of what it doesQples by Foby deliver physical / digital coupons in minutes. They seem to be at the forefront of what they provide, a one-time, fast and efficient solution. It seems that the switch to 8112 is imminent.

[ReynaSingh]

… economics has never been a hard science. It’s an emotions game, if no one thinks they can afford anything, then what good are any economic principles

[newcreationinchrist]

Prices are up, likely won't go back down so yeah. Not feeling too confident myself about the economy either.

[mr.adubes]

Quick and Simple explanation on a topic I always wanted to know more about

[PhilipMurray]

The financial markets seem to be suffering more than the real economy from the prospect of further Fed tightening, I seriously need suggestions on how to diversify my $500k portfolio made up of volatile TSLA.

[danielpalos]

Equal protection of our own at-will employment laws for unemployment compensation can help with confidence issues.

[mariebunel]

There are no shortcuts to *getting rich*, but there are *smart ways* to go about it. I realized early in life the importance of investing for financial independence and have invested with great returns working with *a professional.*

[skjoldgames]

"...consumers, workers are the backbone of the economy."
So that's why we make sure the working class health care workers, teachers, trades and agriculture workers stay at the bottom rungs of society. I guess when the head gets inflated and heavy, the backbone bears the weight.

[mollygiovanna]

They didn’t mention everyone’s 401k balances being down. That’s also part of the negativity.

[GenXamerica]

It went to an all time low in February. Why are we not hearing about consumer confidence at all in main stream news?? It’s all we heard about for years. Misinforming the people and it’s criminal.

[cmlon]

good morning: all my love to George Katona!

[qguru]

Excellent explanations! You made it clear the fate of consumer confidence lies on the shoulders of J. Powell's vibe. May he and all beings be at peace and at ease, knowing each new day is a chance to be a good person.

[kristensorensen]

When gas goes from 45 cents/gal to over $5 a gallon in 50 years that makes me angry! The Federal Reserve is printing too much!!