Part V: Insights From Real-Time Data and Surveys

Part V offers a comprehensive examination of the significance of subjective information, real-time data, and forecasts in understanding the behaviors and sentiments of individuals, businesses, and policymakers. The exploration of consumer sentiments reveals that subjective beliefs about the current and future economic states significantly influence decision-making processes, from individual purchases to business expansions. The importance of real-time data is further underscored, highlighting the discrepancies between initial macroeconomic indicators and their revised versions, which can notably impact interpretation of historical events. Part V concludes with an analysis of predictions made by decision-makers, evaluating their optimism, pessimism, and levels of consensus regarding the economy’s direction, shedding light on the uncertainties faced by decision makers.

Included chapters:

• Chapter 20: “Why Subjective Information Matters” emphasizes the role of subjective beliefs and anticipations in economic decision-making, highlighting their tangible impact on the economy beyond objective measures.
• Chapter 21: “Insights From Consumer Surveys” delves into the University of Michigan’s Survey of Consumers, explaining its significance in capturing U.S. households’ economic perceptions and detailing its methodology, while also highlighting the creation and implications of key consumer indices like the ICS, ICC, and ICE.
• Chapter 22: “Insights From Real-Time Data” emphasizes the significance of real-time GDP and inflation data, highlighting how these figures can substantially differ from later revisions, which is crucial for accurate historical analysis like understanding the 1970s inflation surge.
• Chapter 23: “Insights From Forecaster Data” explores the forecasts of policymakers and businesses, assessing their sentiments about the future economy and the level of consensus or uncertainty among them.