February Money Anxiety Index at 51.4
February Money Anxiety Index at 51.4 amid strong jobs report in January and high probability of a Fed rate hike in March. Nonfarm payroll rose 200,000 in January. Growing consumer spending, better business investment and the recent tax cuts are likely to stimulate the economy farther in 2018.
What is the Money Anxiety Index?
The Money Anxiety Index measures various economic indicators and factors associated with consumers’ level of financial worry and stress. The Money Anxiety Index functions as an early-warning system to shifts in the economy, allowing financial advisors to react in time to changes in the economic cycle.
The Money Anxiety Index Is highly predictive. It predicted the arrival of the Great Recession over a year prior to the official declaration of the recession in December of 2007. In the graph below, you can see how consumers’ money anxiety is trending upwards starting in October of 2006.
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Money Anxiety Index – historical trend line
The Money Anxiety Index consists of monthly measurement of the level of consumers’ financial anxiety for over 50 years. It spans from January 1959 to date. Historically, the Money Anxiety Index fluctuated from a high of 135.3 during the recession of the early 1980s, to a low of 38.7 in the mid 1960s. The 50-year average is 70.7 (July 1980 = 100).
The Money Anxiety Index was developed using Structural Equation Modeling (SEM) with a large sample size of monthly economic indicators meeting, the required measures of fit.