Consumers Aren’t So Dumb

The University of Michigan’s Consumer Survey found that consumer confidence slipped in May to 82.8, down from 88.3 in April. News outlets generally purported to be surprised by this development:

RTT News: “Consumer sentiment in the U.S. has unexpectedly decreased in the month of May….”

Bloomberg: “U.S. consumer sentiment deteriorated unexpectedly in early May…”

Yahoo Finance: “U.S. consumer sentiment deteriorated unexpectedly in early May….”

MSN: “U.S. consumer sentiment index slumps unexpectedly in May….”

Reuters: “U.S. consumer sentiment unexpectedly dropped in early May….”

The Guardian: “[The U. of Michigan consumer survey] fell unexpectedly this month….”

And so on.

Why might consumer confidence be slipping, “unexpectedly”? Maybe because of prices for basic goods rising faster than they have in many years. Maybe because unemployment remains stubbornly high, so that a re-run of Carter-era stagflation looks like a real possibility. Maybe because people are seeing lines of cars at gas stations. Maybe because major companies have prioritized being “woke” over serving their customers. And maybe because many millions of Americans think their president is non compos mentis.

Watch for consumers to surprise the pundits and forecasters often in the months to come.

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