What are the shortcomings in relying on consumer confidence as an economic indicator for analysis?
(Need some extra insight, having problems concluding that this is a bad thing to do.)© BrainMass Inc. brainmass.com December 20, 2018, 12:45 am ad1c9bdddf
What appears to be an increase in consumer confidence can be random fluctuation in spending. The index is based on surveys of how likely consumers are to spend money. They assume that consumers are "typical" and can be predicted based on their answers. However, "typical" consumers are becoming scarce. Income ...
This solution discusses consumer confidence as an economic indicator.