Wall Street, Retail Sales and Consumer Surveys

Jon Economy, Education, Market Commentary

The Wall Street Journal took note of the decline in retail sales reported by the US Census Bureau last week, headlining:

The Journal blamed drops in spending at gas stations and auto dealerships.
Their lead paragraph was emblematic of the stupidity and misleading nature of Wall Street and economic conventional wisdom.
‘U. S. retail sales fell for the second straight month in March, -a sign economic growth eased to start the year despite strong consumer optimism and steady hiring.’
Exactly how did the Journal know that consumer ‘optimism’ was strong?
Answer: Surveys… particularly the University of Michigan Consumer Sentiment Index, and the Conference Board’s Consumer Confidence Index, also known as the Con Con Con Index. The real function of these surveys is to measure how well they have learned the lessons Wall Street has taught survey respondents. Consumers report not whether they have the wherewithal to spend or not. Instead, they report what they think they should say, based on the stock market.

This post was published at Wall Street Examiner on April 21, 2017.