How do you feel when you shop this month? It is a question that many American economists are asking as the holiday season approaches.
The US economic situation right now is causing a stir. Some data looks interesting. The use of solid materials, for example, a flower 1.3 percent in October, twice the expected level. And Deloitte projects for which total customer costs will increase are a 8.1 percent in 2021, after a decline in 2020.
These are some of the things that happen after a plague is stopped. But consumers have benefited from encouraging checks, a growing stock market and more jobs. In fact, there are currently 1.4 jobs per person unemployed in America – history – and history. 4.4 million Americans have voluntarily resigned in September. Social networking sites are rocked by QuitToks enjoys, where people share videos on TikTok and Instagram who celebrate their free idea after retiring.
However some data is very limited. If employment seems to be in full swing, then the wage growth is slowing, as in the past. And while American consumers are wasting money, their frustrations seem to be fading. In November, the Michigan Consumer sentiment index, a monthly survey that finds consumer expectations for the entire US economy, was. running at 67.4, down for 10 years – and another 12.4 percent was slower than in November 2020 (close to the duration of the epidemic).
This could be due to the delay in time. But Richard Curtin, an economist at the study, also blames the theory consumer bags are squeezed and “combining rising inflation with a lack of government regulations that can effectively curb housing prices”.
I suspect there is also a psychological problem: one reason why inflation makes things so sad is that inflation is so unpredictable in recent years that the consumer generation does not know how to change the current situation. The lower level indicates a mental disorder similar to the actual pain.
Worse, this surprise comes a year after the end of the epidemic when consumers see more and more futures being phased out. This can be a waste of time. So even if they are happy spending money now or giving up jobs they do not like, they are afraid of an uncertain future.
This possible psychological explanation, however, is just a matter of fact: we do not know much about how consumer time can change in many ways. And that brings us to another very important point: economists and policymakers need to upgrade their systems to pursue the current economy, in order to incorporate quantity and quality.
This will not be easy. Frequently, economists try to predict the future by gathering recent data, looking for links and moving forward. It usually works well. However, if consumer behavior fluctuates, the past may not be a good guide for the future; At such times, we need the worm’s eye to add to each bird’s pattern.
Events leading up to the global financial crisis provide one example of why this is so important. Prior to 2008, financial companies used to appreciate subprime loans based on a history of consumer infidelity. That sounded logical.
However, there was a catch: at the beginning of the 21st century, attitudes toward debt changed. In particular, when consumers run out of money at the end of the 20th century they often pay off their credit cards, then their car loans – and finally their mortgages. But at the beginning of the 21st century, an unprecedented change in culture took place that led to this change and saw buyers with money starting to fail to rent a home.
It was hard to see the change from a distance; it could only be seen up close. Even economists and analysts did not share that viewpoint.
(Very different from the hedge-fund traders featured in this film The Big Short based on a true story, who met a pole dancer in Florida with subprime credits and found out what was going on.) As a result, their models were flawed – in a way that was hard to see.
Today, some subtle changes in culture are likely to occur. So once again there is a great need for economists to find other ideas. Some organizations are trying to do the following: The Bank of England, for example, employs ethics experts to obtain financial evidence.
Individually, some economists are developing the data sources they use: Alberto Cavallo, a Harvard professor of economics, has recently used the internet, real-time realities to track inflation in a more timely and accurate way than high-value commodities. ogula.
But much more could be done, and it should be done. The more data signals appear to send conflicting messages, the more they need to link the bird’s mind to the worm’s eyes. The economic situation has often been very interesting but difficult to read.
Follow Gillian on Twitter @gilliantett and send him an email gillian.tett@ft.com
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