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The July preliminary Money Anxiety Index dropped 1.4 points to 60.4 from the revised June reading. The July figure of 60.4 is the third month in a row of high volatility.  In May, the Money Anxiety Index dropped 3.8 points to 59.3.  In June it increased 2.5 points to 61.8, and the July preliminary is down again by 1.4 points.

The volatility in the Money Anxiety Index reflects the extreme fluctuation in the jobs market.  The June jobs report shows an increase of 287,000 non-farm jobs, which is in complete contrast to the revised May report showing only 11,000 newly-added jobs.  This extreme volatility in the jobs report combined with the uncertainty about the aftermath of Brexit may prolong the volatility in the Money Anxiety Index for months to come.

By itself, the June jobs report is good news showing that hiring bounced back with 287,000 new jobs, which brings the three-month average to 147,000 jobs.  The FOMC minutes released on Wednesday showed that the committee was concerned about the health of the jobs market in its last meeting.  If future jobs report will continue to show moderate jobs gain, it is very likely that the fed will hike the funds rate in September or in December.  

About The Money Anxiety Index

The Money Anxiety Index is an early-warning system of shifts in the economy.   The index is highly predictive. It predicted 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, a behavioral economist and the author of Money Anxiety.

 

The Money Anxiety Index measures the level of consumers' financial worry and stress based on their spending and savings levels. 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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