Everyone has heard the term “Put your money where your mouth is”, often times in bar room banter when coaxing someone to back up their statements or opinions by putting some cash on the line. Schwab Chief Investment Strategist Liz Ann Sonders released a note this week with research showing that consumers are “saying” they have confidence in the economy going forward, but data such as retail sales figures aren’t matching that level of confidence – in other words, they aren’t “putting their money where their mouths are”. Wall Street analysts and economists collect various measures of data and most can be broken down into either of two groups—“hard” and “soft” data. Hard data are actual figures, retail sales, number of vehicles sold, etc. Soft data tends to be consumers or business managers opinions of the economy—e.g. consumer confidence data and purchasing manager surveys. Ms. Sonders notes that, for example, the Conference Board’s “soft” consumer confidence data hit its highest level in 17 years last month, but on the other hand “hard” data like retail sales fell for a second straight month in March.
