The recent decline in the level of money anxiety among consumers is attributed mainly to the encouraging employment news. In September, employers added 248,000 non-farm jobs bringing the three-month average to 224,000. The improvement in employment also means a likely increase in consumption as a result of widening payroll. The timing of the projected increase in consumption in the 4th quarter is especially important to retailers that are gearing up for a stronger holiday season sales.
The Money Anxiety Index measures consumers’ level of financial worry and stress. Historically, the Money Anxiety Index fluctuated from a high of 135.3 during the recession of the early 1980s, to a low of 38.7 in the mid 1960s. The Money Anxiety Index Is highly predictive. It signaled the arrival of the Great Recession over a year prior to the official declaration of the recession in December of 2007. The money anxiety Index was developed by Dr. Dan Geller, who is an expert in behavioral finance, and the author of the book Money Anxiety.