The media waste far too much time reporting on various consumer confidence measures. These really are not a very good indicator of anything, they often just reflect the tone of reporting in recent weeks.

This is especially true of the future expectations index. This index is very volatile. Consumption is not. What does that tell us?

The current conditions measure is a bit better, but it is more a contemporaneous measure that a predictive one. In other words, if people are buying a lot this month, odds are that their confidence is high, but high confidence in June won't tell us how much people will buy in July.

Anyhow, the June car sales numbers came out yesterday and, as the Post tells us, they were surprisingly strong given the weak confidence measures. If there was ever a category of consumption that should be driven by confidence it has to be car sales. After all, it is pretty rare that someone can't put off the decision to buy a car for another six months. Also, people who are fearful about their economic prospects could always opt to buy a used car instead of a new one.

Anyhow, that does not seem to have been happening in June. People were buying cars at a pretty healthy rate even as they were telling the survey takers that they were worried about the economy. Remember this the next time you see a big story about consumer confidence rising or falling.

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