Moreover, the examination of household-level data is also important in measuring the distributional impact of macroeconomic shocks and macro-financial policy decisions, which can help inform wider policy discussions about income distribution. Before turning to the microeconomic evidence, a natural starting point is to review the standard macroeconomic analysis of aggregate consumption dynamics.
Chart 1 shows that consumption has increased steadily in recent years, which lines up with the substantial increase in household incomes due to rising employment and increasing wages. Another important indicator is consumer confidence, which in turn relates to how consumers view their personal financial situation and the wider macroeconomic situation (Chart 2).