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ANN ARBOR — Joanne Hsu, the Director of the Surveys of Consumers, spoke on consumer sentiment and how it can affect the economy in the latest edition of the Insight Speaker Series at the University of Michigan’s Institute for Social Research on Thursday, October 20.
Tracking consumer sentiment is a key aspect of economic forecasting, and in Hsu’s talk, she explored how consumers’ perceptions of the economy can have far-ranging impacts. The Surveys of Consumers closely monitor a number of aspects of consumer sentiment and behavior, offering unique insights into why people do the things they do in various economic environments.
Hsu’s discussion focused on how inflation can affect consumer behavior in the short and long term.
“If you think inflation is going to go up in the future, you may want to buy things now or stockpile to avoid higher prices in the future. If you think the stock market is on its way up, you may want to invest in the stock market. Or, if you think it’s on its way down, you might decide not to participate in the stock market,” Hsu said. “Your expectations and sentiment over the economy is going to affect the kind of spending decisions and saving decisions you make now and over your lifecycle.”
View Hsu’s talk below, then learn more about her work via this recent paper on how investor education can affect investment decisions.