The “mood-o-meter”

In “A recession in our minds”Joshua Brustein has this to offer:

Are we in a recession in our minds?

Americans certainly seem unhappy about the prospects for the economy. Consumer sentiment remains near its lowest levels since 2009. And those daily indicators of investor confidence — the markets — have painted a very pessimistic picture; the Standard & Poor’s 500-stock index, seen as a broad indicator of the market, is down 8 percent for the year.

But economic data based on what people are actually doing tells a slightly different story. There is no measure by which the economy seems robust, but economic indicators published recently — measuring activity in manufacturing and service, vehicle sales and construction spending — were relatively positive, beating analysts’ expectations. By most measures, the economy is growing, while measures of the national mood are at recession levels.

Yes, the economy is growing, albeit only a tiny little bit. He makes the very common mistake of only thinking in terms of growth rates (even if they are “tiny”) and forgets the all important LEVEL of economic activity. So, growing just a little at a depressed LEVEL, makes  the national mood reflect exactly that. It´s not a “recession level” mood but a “depression level” mood. Therefore, there´s no “mood inconsistency”.

Again I feel obliged to reproduce the best indicator for “mood definition”: The “mood-o-meter”.

2 thoughts on “The “mood-o-meter”

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