Each month a survey of 500 homes across the country is conducted by some low paid telephone solicitors with thick skin. That extracted data is then reviewed by some of the brightest minds in Michigan and a numerical value is placed on the collective feedback of of Mr. and Mrs. America regarding how they are planning to spend any money that they may or may not have. That number is published monthly as our Consumer Sentiment. This month, Consumer Sentiment is up more than an aggregate body of wagering economists anticipated (for those of you keeping track at home, November’s number is 93.1). In short, they concluded that we feel good about buying stuff.
That’s great news for monetary growth because two-thirds of our U.S. economy is accounted for by all of that stuff that we consumers purchase. The disconnect this month is that consumer spending (AKA: Retail Sales) didn’t reflect the optimistic outlook that the brains in Michigan calculated. That Retail Sales report is published by the Commerce Department (as in The United States Department of Commerce, not the commerce department of the local Cal-Ranch store). Consumer spending is less than half of what it should be during a normal economy, chugging along at a 2-3% annual growth rate. Where the majority of economic activity in our country happens when you and I whip out the debit card, our (collective) failing to spend money is adversely impacting the economy as a whole.
That is a long explanation for me to tell you that as I see it, we are not putting our money where our mouth is.