Goolsbee: Consumer Sentiment Less Useful as Data Diverges

1815 ET - Chicago Fed President Austan Goolsbee says consumer sentiment data is proving less useful for the Fed's forecasting as it continues to split further from what consumer spending data shows. "We're experiencing record divergence between the vibe and the hard data," Goolsbee says while delivering remarks in Chicago. The factors driving that divide include higher gas prices and food prices, which have high visibility and an outsize impact on sentiment, he says. People are also becoming less trusting in public institutions, including the Fed, Goolsbee says. That weak sentiment data is still important in a lot of applications, just not the Fed's "very narrow" purpose of balancing stable prices with maximum employment, he says.