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Consumers feel glum and pessimistic about the economy surveys, including the December data from the University of Michigan’s survey of consumers, show. But they’re spending as if they feel pretty good. Why the disconnect? For starters, the economic disruptions of recent years. First, pandemic lockdowns that crashed the economy and then soaring inflation have likely left many people feeling uncertain and wary about what comes next.
Also, bad news headlines and political polarization may be leading consumers to feel that the overall outlook is bad, even if their own finances aren’t so dire. If so, the Conference Board’s reading on consumer sentiment may gradually trend higher than the University of Michigan’s survey, since the former poll asks more questions about a respondent’s personal situation.
