The preliminary December Money Anxiety Index stands at 56.7, which is the same level it was 10 years ago. The decrease in the level of money anxiety prior to the holiday season indicates that consumer spending is likely to increase this holiday season because consumers feel more financially confident.
During the past 10-year, the Money Anxiety Index peaked at 100.8 on June 2011. The climb up was much faster for the Money Anxiety Index than the road back down to its current level of 56.7. It took the Money Anxiety Index 54 months to climb up to 100.8 compared to 66 months to decrease back to its current level of 56.7.
The one-year time difference between the increase and decrease in the level of money anxiety shows that it takes longer to build financial confidence than to destroy it. The impact of the lost jobs, property and wealth during and in the aftermath of the Great Recession was much stronger than the impact of the job gains and economic improvement during the recovery period.
Dr. Dan Geller is a behavioral economist and the author of Money Anxiety. He pioneered the research on the link between money anxiety and financial behavior. Based on his research, Dr. Geller developed the Money Anxiety Index, which predicts economic trends. The Money Anxiety Index signaled the arrival of the Great Recession 14 months prior to the official start of the recession in December 2007.
Dr. Geller appeared on national TV and radio, such as CNBC and Fox, national and financial publications and delivered the keynote address in national conferences such as American Banker’s Banking Analytics Symposium. Dr. Geller earned his Doctoral degree from Touro University, and has published numerous peer-reviewed articles in scientific publications.