Aggregate consumer expectation indexes as indicators of future consumer expenditures

Abstract

Multivariate vector autoregression analyses were undertaken to investigate whether or not aggregate consumer attitude and expectation measures such as the University of Michigan Index of Consumer Sentiment and Consumer Expectations and the Conference Board Index of Consumer Confidence and Consumer Expectations possessed a priori information not contained in certain economic variables which might be useful in anticipating changes in future aggregate consumer expenditures. The multivariate vector autoregression analyses indicated that the aggregate consumer expectation measures led the aggregate consumer expenditure measures more often than did the economic indicators. Thus, the aggregate consumer expectation measures appeared to provide predictive power not possessed by the economic indicators in the analyses. PsycINFO classification: SC 11470; SC 18460; SC 15915