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Money Anxiety Index Latest Indicator of a Double-Dip

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Where there is misery there also usually is anxiety.

Such is the case with two economic indicators, both showing conditions that have deteriorated to levels not seen in as much as 30 years.

The latest indicator to ring up trouble is the Money Anxiety Index, which uses traditional economic metrics as well as other factors to gauge the level of consumers' worry regarding their personal financial conditions.

According to the May figures, the MAI is not only at its highest level in 30 years at 91.9 but also two months away from indicating another dip into recession. In the past, five straight months of increases in the index often signaled recession.

“If this trend will continue for a couple more months the likelihood of a double-dip recession is very high,” Dan Geller, chief research officer for Money Anxiety, said in an interview. “Pretty much the main reason is uncertainty about the prospects of an economic recovery.”

The trend in the lesser-followed MAI comes on the heels of the Misery Index—a bit more well-known of a trend indicator—rising to levels not seen since May 1983. The Misery Index adds the unemployment and annualized inflation rate and currently stands at 12.7.

Both gauges are indicative of burgeoning problems for an economy still trying to find what the pros call “escape velocity” despite trillions in stimulus, bailouts and easy money.

“People feel it in their personal life, in the increasing Consumer Price Index, the unemployment situation, housing,” Geller said. “Overall, all those conditions pretty much lead to a lack of confidence in the recovery.”

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