A new paper from the Swiss Economic Institute found that TV sentiment predicts consumer spending patterns better than the UMich consumer sentiment index (via Paul Kedrosky):Our results suggests that TV sentiment influences the ordinary consumer and her behaviour. More positive TV sentiment causes growth in private consumption. The best model for explaining private consumption in the US consists of a combination of TV sentiment as well as personal savings and income. The University of Michigan Index of Consumer Sentiment performs worse than TV sentiment in explaining changes in monthly private consumption growth.
This is kind of sad and not too surprising. And the upshot is: CNBC seems relatively upbeat this week. Consumers will feel like spending.
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