The holiday season is nearly upon us and people are a little
more optimistic about the economy then they were just a few months ago. People
are slowly starting to feel good about their future prospects and the potential
for their incomes. According to the Gallop Poll a -6 is a significant
improvement over the -20’s experienced throughout the year.
Economic confidence is a beneficial metric but isn’t a very
conclusive one. Much of economic confidence is based in how people perceive the
environment and their opportunities within it. New reports and the general
impressions of reports does have an impact on economic impression (Barsky &
Sims, 2012). Some have called positive economic beliefs part of our animal
spirits.
Animal spirits are more psychological images and impressions
than objective data. If you buy more on days when you feel good than on days
you don’t then this is your animal spirits coming to play. What we read and how
we read the environment will naturally have some impact on our animal spirits.
This perspective can add up to a lot over time.
Cultural-ecological perspective across 45 countries has an impact on economic development
(Chou & Loafsson, 2011). How we perceive our environment has an impact but
that impact is not a one for one economic tally. Simply feeling confident about
the environment may encourage people to spend more but may not impact long term
growth.
Positive consumer beliefs may be part of the holiday season
or could a growing trend. As consumers improve their outlook for their own
prospects they will naturally spend more over the holiday season. Hopefully
this translates into greater sales and hiring throughout the year. Sometimes
the economy has a self-fulfilling prophecy spirit where positive impression
leads to sales and activity.
Barsky, R. & Sims, E. (2012). Information, animal
spirits, and the meaning of innovations in consumer confidence. American Economic Review, 102 (4).
Chou, L. & Olafsson, S. (2011). Confidence as an
economic indicator: a cultural-ecology perspective. Brussels Economic Review, 54 (4).
