View From a Height

Meaningless Numbers

When even the professor gets sucked into a meme, you know it's powerful. It's a shame it's also meaningless.

Consumer confidence rose again last month. Now, while I'd rather have people cheerful than depressed (financially or emotionally), this is one of the less useful numbers around.

As our securities analysis professor said, "never trust anything that anyone tells you." We ran a correlation between the consumer confidence numbers and economic performance, leading, trailing, and side-by-side, and we got "pretty close to irrelevant" as our answer.

While it makes intuitive sense that a confident consumer is our best customer, in fact, consumer confidence has a lot less to do with objective national or personal economics, and a lot more to do with the news you're getting. Freed from the frenzy of a national election, not only is MSM reporting probably less tilted, but people's perceptions of it are probably less biased, too.

This isn't bad news, but it isn't really good news, either. It's just no news.