Last week, the Conference Board reported that its Consumer Confidence Index rose to a near seven-year high in mid-August. It was the fourth consecutive monthly rise in the Index and handily beat the pre-report consensus.
While I have no reason to doubt the validity of the latest Consumer Confidence Index reading, there are several other indicators which suggest that consumers are not so optimistic in reality.
When it comes to the direction the country is headed, 66% believe we are on the “Wrong Track,” with only 26% who believe we’re headed in the “Right Direction.”
Recent polls on the question of whether the next generation’s life will be better than our own have been decidedly pessimistic. For example, the latest NBC News/Wall Street Journal poll of adults found that only 21% believe life will be better for their kids, while a whopping 76% feel it will be worse, the highest negative reading in the poll’s history.
I will cite other examples of statistics that challenge the latest soaring Consumer Confidence Index as we go along today. The question is: How, in the face of all these negative indicators, can consumer confidence be at a near seven-year high?
Before we get into the discussion of the latest consumer confidence reading, let’s take a look at a few other recent economic reports.