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Consumers are confused by conflicting economic signals during the first 5 months of this year.  Contrary to the second half of 2014, which exhibited a robust improvement in GDP and employment, the first 5 months of this year delivered mix signals of economic indicators causing uncertainty and confusion among consumers.

In January of 2015, the Money Anxiety Index increased 2.0 points to 67.5 indicating financial unease among consumers about the coming year.  The harsh winter during that time may have contributed to the increase in financial anxiety.  By April of this year, the Money Anxiety Index improved to 66.0 reflecting a slightly lower level of financial anxiety among consumers after a disappointing first quarter results.

The June preliminary Money Anxiety Index stands at 67.1, which is the same as May, indicating that consumers are taking a “wait and see” approach.  The normal tendency of consumers during times of financial uncertainty is to hold back on spending, which was evident in a flat personal consumption figure during April.  

“On the road to recovery, the U.S. Economy is in front of a traffic signal that has both, red and green lights, on at the same time” says Dr. Dan Geller, the developer of the Money Anxiety Index and the author of the book Money Anxiety, “Some economic indicators are positive signaling a green light to proceed, and others are negative signaling a red light to stop.  Which light is the real one?”  

The Money Anxiety Index was created by Dr. Dan Geller, a behavioral finance scientist and the author of the book Money Anxiety.  The index measures the level of consumers’ financial worry and stress based on their spending and savings pattern.  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.  


 


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