1. julio_slsc Said,

   How do trends in the Consumer Confidence index affect people's savings practices?
   When consumer confidence declines, do people put money away for a rainy day?

   Do they save up for big purchases and delay that purchase as opposed to taking on additional debt?

   Please provide some sources.

   Thank you in advance.

   julio

2. Dave W Said,

   I think that depends on what part of the index is declining. If people think the economy is declining but still feel comfortable about their own job, then they’re likely to keep spending. Many people (as least in the US) do a very poor job of saving for the future. They figure that as long as they don’t run out of money before their next paycheck, all is good. When the sun is shining, they don’t worry about rain. But when they get worried about their own job, I think they do finally start to cut back a bit on spending.

   The referenced interview is from 2001, but the same concepts still apply today.
   References :
   http://www.pbs.org/newshour/bb/economy/jan-june01/confidence_4-30.html

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