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Tracking Business and Consumer Sentiment

April 29, 2022

With media headlines focused on business and consumer sentiment, we are often asked if we feel optimistic or pessimistic about the economy. We like to answer that question based on what the data tells us. Learn more with the latest episode of TrendsTalk with ITR Economist Lauren Saidel-Baker.



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The below transcript is a literal translation of the podcast audio that has been machine generated by Rev.

Hi, I'm Lauren Saidel-Baker and welcome to this episode of ITR Economics TrendsTalk. I have been getting a lot of questions recently about sentiment. We track a lot of different sentiment indicators from consumer sentiment, business sentiment, I'm sure you've seen the same ones in the headlines, and so many of my clients and my audiences, they ask, based on this latest sentiment reading, are you optimistic or pessimistic about the state of the economy? And I really find that that isn't quite a fair question. We can be optimistic and hope for the best but plan for the worst, but really, I prefer to see what the data says because my job is to find that unemotional, that unbiased data and really track what's happening. So we can look at some business sentiment indicators, several have been ticking down recently, but I don't prefer to hear what other people think or what other people have to say when it doesn't necessarily impact their investment cycle or their own spending patterns.

Businesses for example, right now, we follow business bankruptcy filings. Those are down 33% from this time last year, and critically, the outright number of the business bankruptcy filings is in a post great recession low. So whatever the sentiment indicators say, businesses don't seem to be failing as much as those indicators might make you believe. We find that banks are willing to lend so businesses have a huge amount of borrowing ability, and in fact, the delinquency rates on corporate and industrial loans, those are currently at 1.1%, again, an incredibly low delinquency rate. Moreover, liquid assets are up. Our non-financial corporate business liquid assets, up 11% from this time last year at $6.8 trillion. So despite what the business sentiment indicators are telling us, it seems to me that the data show, businesses are still very strong.

So that's the type of information that I prefer to use for planning, not which way the headlines tend to be changing or which way sentiment is swaying us, but what do the data say? Because optimist or pessimist, I prefer to be a realist. That's the power of an ITR economics forecast. I don't care if the glass is half full or half empty, I care to know that glass with 94.7% accuracy.

Thanks so much for joining me for this episode of ITR Economics TrendsTalk. I'm Lauren Saidel-Baker. Let's talk more soon.


Since 1948, we have provided business leaders with economic information, insight, analysis, and strategy. ITR Economics is the oldest privately held, continuously operating economic research and consulting firm in the US. With a knowledge base that spans six decades, we have an uncommon understanding of long-term economic trends as well as best practices ahead of changing market conditions. Our reputation is built on accurate, independent, and objective analysis.