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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael

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Speaker 1: Thompson and good afternoon, Adam Lang.

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Speaker 2: Oh, good afternoon, Michael. Adam.

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Speaker 1: I'm already smiling because today's question is just so far

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Speaker 1: up your alley because it's just it's all about data,

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Speaker 1: and you can see that you are very, very very

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Speaker 1: keen to rip straight into it. The question comes from Jacob.

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Speaker 1: He shared it via Instagram and he says question for

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Speaker 1: Ask Fear and Greed if it fits, and yes, Jacob,

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Speaker 1: it certainly does. Says you talk quite a bit about

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Speaker 1: consumer sentiment and business sentiment. How is it actually measured?

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Speaker 1: He says, I get measuring something like how much we're spending,

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Speaker 1: or how much we're saving, or how much businesses are investing,

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Speaker 1: because those are dollar values. But sentiment is how we feel.

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Speaker 1: So how do they measure it? And who does the measuring?

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Speaker 2: So, Michael, I just jumped straight into this question, as

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Speaker 2: you can imagine.

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Speaker 1: Like a kid in a candy store. Yeah, so like

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Speaker 1: an Adam in a data center.

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Speaker 2: Nice one, Jacob, and I'll be happy to give answering

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Speaker 2: a shot. So measuring sentiment, whether it's consumer or business

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Speaker 2: is different, as you suggest, from tracking spending your investment

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Speaker 2: instead of looking at dollar values. Sentiment surveys like the

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Speaker 2: Westpac Melbourne Institute Consumer Sentiment Index and the National Australia

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Speaker 2: Bank Monthly Business Survey, they measure how people and businesses

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Speaker 2: feel and they track that data over time. So for

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Speaker 2: the Consumer Sentiment Index, Westpac and the Melbourne Institute survey

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Speaker 2: around twelve hundred households each month, asking questions about their

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Speaker 2: views on the economy, their financial situation, and whether they

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Speaker 2: think it's a good time to make major purchases. The

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Speaker 2: responses are then aggregated and indexed, with one hundred points

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Speaker 2: representing the neutral mark. Anything below that indicates pessimism and

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Speaker 2: anything above that shows optimism. The July data, the most

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Speaker 2: recent do that we have showed this index. It's eighty

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Speaker 2: two point seven, so consumers obviously felt gloomy.

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Speaker 1: So as soon as we as soon as we nudge

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Speaker 1: below one hundred points, that's when Sean ale that starts

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Speaker 1: referring to everyone as a what's his favorite term, You're

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Speaker 1: a miserable bunch, I think is the way he is

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Speaker 1: just generally attacked. Australian society.

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Speaker 2: I love the way he says you. He doesn't. It's

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Speaker 2: not very inclusive, is it everyone else?

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Speaker 1: Occasionally occasionally it'll be where a miserable bunch, aren't we

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Speaker 1: And that's if he's feeling particularly gloomy, But generally it's not.

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Speaker 1: It's everyone else's fault.

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Speaker 2: So moving on to the National Australia Bank Monthly Business Survey,

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Speaker 2: it works in a similar way. Each month it surveys

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Speaker 2: around four hundred businesses across a range of industries, asking

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Speaker 2: about sales, profitability, employment and their expectations for the future,

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Speaker 2: and that feeds into the sentiment index. The long run

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Speaker 2: average index for the National Australia Bank Monthly Business Survey

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Speaker 2: is typically around plus six index points. The July index

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Speaker 2: number had this number of plus one, so business sentiment

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Speaker 2: is concerned. So these two surveys give us data about

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Speaker 2: confidence in the economy, which can influence decisions on spending, investment,

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Speaker 2: and hiring. So while it's not dollars and cents, the

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Speaker 2: measures of sentiment give us a good read on the

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Speaker 2: economic mood. We get new data each month, so obviously

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Speaker 2: stay tuned to fear and greed to keep track of it.

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Speaker 1: And I mean you know how at school, say, when

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Speaker 1: students are given an assignment to do, and you can

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Speaker 1: tell their enthusiasm for it by kind of how quickly

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Speaker 1: they rush off to actually do it. And usually if

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Speaker 1: the assignment is on something like poisonous snakes or shark

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Speaker 1: attacks or serial killers or something, there is a great

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Speaker 1: deal of enthusiasm. It feels like we just gave you

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Speaker 1: the equivalent of an assignment on serial killers or something,

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Speaker 1: asking you to go off and research data and how

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Speaker 1: data is compiled and how surveys are done, and how

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Speaker 1: all the information is aggregated. It just feels like, I

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Speaker 1: don't want to overstate it, but it feels like Jacob

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Speaker 1: actually gave you a gift.

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Speaker 2: He did, didn't he? In fact, even though he didn't ask.

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Speaker 2: He might even deserve a mea mug, a most Enthusiastic

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Speaker 2: Advocate mug just for the great question.

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Speaker 1: Oh gosh, you and handing out of me and mugs.

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Speaker 1: You're as bad as Sean, the two of you. Between

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Speaker 1: that between you, you nearly used up our entire first

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Speaker 1: shipment of me and mugs. But it is great to

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Speaker 1: see them going. Two good homes. The meya the most

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Speaker 1: enthusiastic advocates. Of course, the award that we give to

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Speaker 1: people who kind of spook fear and Greed to their friends,

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Speaker 1: to their colleagues, to their family, and any excuse to

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Speaker 1: send a mug out, isn't it.

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Speaker 2: Yeah. Well, I'll tell you what, Jacob, if you spook

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Speaker 2: this on the social media machinery, you'll get a mea mug.

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Speaker 1: Oh, there you go, Jacob. That's a pretty good offer.

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Speaker 1: Thank you Jacob for the question, and thank you Adam

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Speaker 1: for answering it so enthusiastically and comprehensively. Thank you, Michael

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Speaker 1: did remember if you've got something that you would like

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Speaker 1: to know, then please send you your question through on

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Speaker 1: Instagram like Jacob did, perhaps on LinkedIn, Facebook or at

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Speaker 1: Fearangreed dot com dot au r Michael Thompson and this

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Speaker 1: is ask Fear and Greed