Consumer Confidence: A Useful Indicator of... the Labor Market?

Joshua Abel, Jason Bram and Robert Rich

No 20130904, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Consumer confidence is closely monitored by policymakers and commentators because of the presumed insight it can offer into the outlook for consumer spending and thus the economy in general. Yet there’s another useful dimension to consumer confidence that’s often overlooked: its ability to signal incipient developments in the job market. In this post, we look at trends in a particular measure of consumer confidence—the Present Situation Index component of the Conference Board’s Consumer Confidence Index—over the past thirty-five years and show that they’re closely associated with movements in the unemployment rate and in payroll employment.

Keywords: consumer confidence; unemployment; employment; labor markets (search for similar items in EconPapers)
JEL-codes: E2 J00 (search for similar items in EconPapers)
Date: 2013-09-04
New Economics Papers: this item is included in nep-mac
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