Journal Article
Forecasting with Feelings: The Modest Link Between Consumer Sentiment and Spending
Abstract: Recent declines in consumer sentiment have prompted concerns about an impending slowdown in spending growth. However, the link between consumer sentiment and growth in real household spending has been modest historically, suggesting changes in consumer sentiment are unlikely to significantly alter forecasts of household spending. Consistent with this interpretation, despite the downbeat tone from consumers, sentiment does not meaningfully alter near-term predictions of 2025 spending growth.
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https://www.kansascityfed.org/documents/10866/EconomicBulletin25MustredelRioNichols0516.pdf
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Provider: Federal Reserve Bank of Kansas City
Part of Series: Economic Bulletin
Publication Date: 2025-05-16
Pages: 4