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The de-coupling of confidence and spending

October 29, 2011

Dave over at ETF Digest (a required read for planners) posted an interesting chart yesterday that shows how the correlation between consumer confidence and spending, that had been so reliable, has broken apart.

The logical assumption obviously being that the less confidence consumers had in the economy, the less likely there were to spend.

Now, although people lack the confidence, they still seem to be spending.

One thing that’s for certain is that we now have less confidence in the confidence numbers being a guide to anything meaningful.

Surely there are other ways to ask consumers about how they really feel about the economy and their futures and get to something that provides a better fit to spending.