GUEST POST from Don – Consumer Confidence

CONSUMER CONFIDENCE INDEX

If you read the news sources OR talk with the average person you would IMAGINE that the economy is in shambles and that no one can afford a can of cat food.  Neither of those things is true, of course.

First, the inflation rate is actually VERY GOOD.  Any inflation number below 3.21% is truly wonderful.  Just three years ago we were begging for lower inflation when it was north of 7%.  The inflation number is what it costs the average consumer in increased price of goods and services.  We complain when egg prices hit $8, but don’t notice that gas prices are below $3.  The combination of ALL prices gives us the average.  Of course, if your family eats eggs at every meal you are getting creamed at the store.

Just a few months ago I was hearing how awful tariffs were.  It took a long conversation and a lot of patience to explain to one individual that the cost of tariffs is INCLUDED in the inflation rate and since inflation was (at that time) below 3% there was absolutely nothing to worry about.

Second, even though there’s a lot of tongue wagging about the “horrible” economy, people aren’t BEHAVING like they are being hurt by it.  That’s where the “Consumer Confidence Index” comes in.  The index measures how people BEHAVE.  People are going out to eat (and donating 20% tips).  People are buying new cars and trucks (that cost as much as my new-build first house did).  They are behaving as though there is nothing to worry about.

Even with the non-war with Iran the stock market is far above where it was a year ago.  Businesses are making great profits.  Blue collar workers have jobs (white collar folk are a bit worried since the advent of AI).  And we’re sending people into space again.

Confidence in the economy (on a personal level) is almost at 92%, even though lots of people “think” someone living near them may be having trouble paying for tater tots.

The point is that people believe “others” are struggling, but in general our population is not.  Oh, yes, there are always some who are hurting.  But that was true 4 years ago, 20 years ago, and 80 years ago.  The truth is that most folk are living comfortably.  If people were experiencing difficulties (or believed that soon they would be) they would not behave like they weren’t.  They’d be cutting expenses and putting all they could into savings.  Those things aren’t happening.  The economy is roaring, but few want to celebrate that fact.

Let me be clear, a 92% CCI is nothing to sneeze at.  Under Biden and Obama it stayed below 80% for much of their terms (and at times dropped below 60).  Also to be clear, the CCI is not a 100 point scale.  It has soared to 120 at rare times of intense confidence.

However, where would the Index be if the news sources weren’t criticizing the economy in every story?  For instance the one today which claims that “The American Dream” is dead.  I can tell you for a fact it is not.  In the acres next to our house they are building 525 NEW homes which are under contract before they build.  Every home has an owner.  In fact, if they built 4,000 houses they would all sell.  Every home that goes on the market in our area sells quickly if it is appropriately priced. (No!  I’m not giving you a $million for your flood-zone marvel!)

Oh, and every ounce of overpriced Easter candy at our local Wally World sold before Easter, except those bags of crappy hard candy.  Even the foam-board and sugar thingys flew off the shelves.  If you can afford that junk the economy is “doing just fine, thank you!”

Have you seen all the expensive cars on the highway?  Also, in our residential area there are many, many zoom bikes.  We are amazed at all the kids who ride around on e-bikes.  It seems no one can afford the energy to pedal their own $1,500 (and up) bike. (Some families have three or more.)  And almost every teen has an $800 personal communication device (along with a pricey data plan).  How can we afford those if we can’t pay for groceries?  Well….

As it turns out the culprit is rarely the costs of goods.  This couple found out the hard way that a zip code was their problem:  “Montana couple built their dream home 26 years ago — now a 107% spike to their property taxes could push them out.”  Their annual property taxes now exceed $60,000.  That is not an economy issue, it is a local government issue.  They should have sold  and moved when taxes crossed the $20,000 per year mark.

Still others can’t stop making foolish decisions.  Sometimes we watch in horror as someone we know does DUMB AGAIN … like this:  “Pete Davidson Gets New Face Tattoo After Spending $200K Removing Others.”  This isn’t an economy issue, it is an emotionally immature issue.  Don’t blame the economy when someone you know can’t afford braces for his child because he just spent $100k on a truck when he has a white collar job.  (“Yah!  I’m going to pay $8 for a 2×4 and whittle it into a toothpick.  I need a shiny new truck to haul it home.”)

Inflation is at or below the 50 year average.  Consumer confidence is at or above the 40 year average.  Both are VERY GOOD!  The folk who live nearby are buying things they don’t need.  I think you get the picture. 

Do you know anyone who is struggling now who wasn’t struggling two years ago?  I don’t.  Asking around (as I often do) I haven’t found a single person who knows a person like that.  It makes me wonder if we’ve been sold a lie…and have fallen hard for it.

Copyright 2026 Donald Whelpley

[PLEASE NOTE that Don is always open to discussing the thoughts and opinions he shares here and welcomes comments as shared in the comment section. He doesn’t use other social media platforms and won’t see whatever you’d like to share with him if you post it elsewhere.
ALSO, Don is always open to offer his thoughts on various topics. If you have a specific request, you can let him know in a comment; he reads – and replies to – them all. ~ Sherry]

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