Takeaways:

  • Market trends and research conclusions sometimes conflict with one another.
  • Why the discrepancy? Dr. Dan Geller, a behavioral finance scientist, says, “We keep listening to the same erroneous economic surveys of consumers’ opinion again and again hoping to get different results. The reality is that what people say is not always how they act, especially financially.”
  • According to Geller’s Money Anxiety Index, which measures consumer financial confidence by observing actual financial behavior, consumers’ level of financial anxiety dropped 0.1 point in July.

On any given day, you can read a handful of stories on Inman about recent market trends and research — but the conclusions made by some analysts sometimes seem to conflict with each other.

For example, Fannie Mae recently reported in its July National Housing Survey that the percentage of consumers who think now is a good time to buy a home dropped to an all-time low of 61 percent.

At the same time, housing starts actually rose in July to the highest level since October 2007, and single-family starts surged 12.8 percent, according to the U.S. Department of Commerce.

So why the discrepancy? According to Dr. Dan Geller, a behavioral finance scientist, “The disparity between what people say in response to confidence surveys and the way they actually behave with their money is a known phenomenon” in his field.

“We keep listening to the same erroneous economic surveys of consumers’ opinion again and again hoping to get different results. The reality is that what people say is not always how they act, especially financially,” Geller said.

Geller noted that last month the Thomson Reuters/University of Michigan Index of Consumer Sentiment reported a decline of 3 points to 93.1 in July, and the Conference Board Consumer Confidence Index dropped 8.9 points to 90.9.

But then the U.S. Department of Commerce issued its own numbers, reporting that retail sales increased 0.6 percent in July.

“Here, again, the decline in financial confidence consumers reported to confidence surveys is the complete opposite to their financial behavior, which was higher retail spending in July,” Geller said.

9984648_orig

In 2013, Geller published “Money Anxiety,” a book that established a link between the level of financial anxiety and consumer behavior. In the book, Geller explains that prior to the housing industry bust, consumer confidence indices were late to report on the looming recession because at the time, consumers still remained optimistic in their reporting to surveys — but, as Geller noted, their financial decisions told a different story.

“A true measurement of financial confidence among consumers is achieved by measuring what consumers actually do with their money, or their objective, rather than ask them how they feel, which is subjective,” Geller said.

According to Geller’s Money Anxiety Index, which measures consumer financial confidence by observing actual financial behavior, consumers’ level of financial anxiety dropped 0.1 point in July.

So the takeaway here? There was higher confidence in July, which explains the increase in retail sales, Geller concluded.

Email Amy Swinderman.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×