Why Is Spending So Strong If Consumers Are Miserable?

It’s a bit of a conundrum how to square the apparently serious drop in consumer confidence with Tuesday’s retail reports. Of course, there is more than one measure of confidence (as discussed on Monday) so fixating on the worst reading might be misleading. As a general principle, though, it’s usually a good idea to watch what people do rather than what they say. For now at least, the public is behaving as if things are just fine.