September preliminary Money Anxiety Index came in at 71.6, the same level as in the previous month. However, the September Money Anxiety Index is 1.2 points lower than in July indicating that the jolt in July was temporary due to concerns over the economic and financial conflict with Russia, which now has subsided in lieu of the talks between the presidents of Russia and Ukraine.

A more stable level of money anxiety among consumers in September likely to improve GDP performance in the 3rd quarter of this year as consumers tend to increase personal consumption when their level of money anxiety is lower.  Conversely, as demonstrated in July, consumers reduce their personal spending when their level of money anxiety increases.  Personal consumption in July declined $12.0 billion compared to an increase of $51.2 billion in June, a variance of $63 billion cased by higher level of money anxiety.  

The Money Anxiety Index resembles a rollercoaster thus far this year.  In the 1st quarter, the index increased 1.3 points to 79.2 then dropped 7.9 points in the 2nd quarter to 71.3, after which it increased 1.5 points during the July jolt, and lately dropped 1.2 points to its current level of 71.6.  These fluctuations in the Money Anxiety Index are an indication of consumers’ uncertainty about the direction of the economy and, as a result, their own personal finances.



09/29/2014 11:02pm

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