The Effect of the Stock Market on Consumer Spending: 1990-2002”

This paper investigates the relationship of the stock market and consumer spending between October, 1990 and April, 2002 in order to determine if the effect of the stock market on consumer spending changed over the course of the most recent market rise and fall (Figure 1). Considering the extreme volatility of the market over the past years, and the rise in the number of consumers invested in the market, the relationship between consumer spending and the stock market was likely different than that which existed during previous periods.