The thirty-three-month proof of concept test of 8Sages real-time tracking of consumer financial balances is complete and successful.
Changes in the Consumer Balance Index (CBI) successfully marked the start of the recession, tracked the career of the economy during the recession and identified the end of the recession.
The Consumer Balance Index (CBI) tracks consumer perception of the strength of their financial balance – assets and income versus debt and spending. Information comes from telephone interviews conducted during the first ten days of each month with 500 consumers sampled from the nation at large.
Marking the start of the recession, the graph that follows shows the CBI plunged from 95 in October 2007 to 87 in November 2007. The Bureau of Economic Research later announced that the recession began, officially, in December 2007.
The CBI recovered half of its October-to-November loss by February 2008 and then moved irregularly down to a low of 73 in October 2008, a mark reached again in September 2009.
From that September 2009 low of 73, the CBI moved irregularly higher to 87 in April 2010, matching for the first time since the start of the recession the highest level reached since that start.
On October 20, 2010, the Bureau of Economic Research announced that the recession officially came to an end in June 2010.
The CBI decline in the months immediately following April 2010 indicated the recovery is fragile, which is in line with announcements made by the federal government.
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Survey procedures are being upgraded to take advantage of what was learned. Publication of monthly reports is temporarily suspended pending completion of the upgrade.
Copyright October 2010 by Leo J. Shapiro – All Rights Reserved.