Wednesday, November 30, 2011

Consumer Confidence and Personal Consumption Expenditures

With yesterday's much publicized jump in consumer sentiment, I thought I'd take a look at the relationship between consumer spending and consumer sentiment. 

The above chart shows the percentage change from last year of personal consumption expenditures (left side scale) and the University of Michigan's consumer sentiment (right side scale).  Notice there is a pretty strong relationship -- except for this recovery.