Consumer confidence is mixed, but not all that bad

The headlines insist that consumer confudence declined since December (from 90.6 to 87.9), by the truth is a bit more complex. Yes, the "expectations" index declined (from 75.8 to 69.6), but the present conditions index actually rose, from 112.9 to 115.3.

This phenomenon happens a lot: consumer lose confidence in the future because they are bombarded by negative messages from the media, but in fact those same consumers have to admit that their current situation is not that bad.

Keep in mind that consumer sentiment reports are not reliable indicators of future consumer spending.

In truth, cash in your wallet and a steady paycheck are better indicators of future consumer spending. A rising present conditions index is actually a good sign that things are not as bad as the media reports suggest.

-- Jack Krupansky