Consumer sentiment polls are political mood rings—ask a Republican, get a rainbow; ask a Democrat, get a thunderstorm. Either way, it’s emotional weather, not economics. In plain English, the consumer sentiment data is just partisan gossip dressed in statistical drag—more politics than proof, more bias than balance, more illusion than insight.
If consumer sentiment were a birthday cake, it would be
made of half-baked opinions, topped with a swirl of political frosting, and
served with a wooden spoon of bias. People talk about consumer sentiment data
like it's the second coming of Christ. The media worships it. Wall Street
trembles at it. And the politicians? They spin it harder than a DJ at a Vegas
nightclub. But here’s the dirty little secret they won’t tell you: consumer
sentiment is not the voice of the people—it’s the voice of whoever still owns a
landline phone and answers it.
I’m a statistician. I know the game. And the truth is,
the way this so-called data is collected is nonsense. They call households that
still have landlines—yes, landlines, those dusty relics from the 1990s—and they
ask, “How do you think America’s economy is doing?” And then what happens next
is not analysis, it’s theater. If the person who answers the phone leans left—a
blue person—they’ll say, “Oh, it’s awful! We’re all doomed!” But if it’s a red
person on the other end, they’ll gush, “It’s never been better!” The data that
results isn’t an economic report—it’s a political tug-of-war disguised as
statistics.
Let’s not kid ourselves. Consumer sentiment is not
economics. It’s political mood polling in costume. Think about it: now that Donald Trump is in office, consumer sentiment
among Republicans was sky high—even when inflation ticked up and unemployment
jumped. But when Joe Biden was in office, Democrats suddenly became
optimists—until gas prices rose and Republicans declared an economic
apocalypse. These swings have less to do with reality and more to do with the
political weather forecast. When the rooster crows at dawn, it doesn’t mean
he made the sun rise.
What you have here is not measurement; it’s manipulation.
It’s the same kind of ridiculousness we see in college classrooms every
semester. Every professor knows the dance. If students are passing, they give
you glowing reviews. But if they’re failing—especially in classes like math or
statistics—they log on to Rate My Professor and unleash their wrath. “She’s
boring.” “He’s too hard.” “The test was unfair.” Never mind the fact that the
student didn’t study or skipped half the lectures. It’s a blame game, not a
fair rating. A drowning man will blame the river, not his own swimming.
So when I see economists and TV anchors waving around
consumer sentiment scores as if Moses brought them down from Mount Sinai, I
laugh. These numbers are fragile, reactive, and politically polluted. Even when
consumer sentiment crashes, people still shop. Even when it soars, businesses
still close. That’s because consumer sentiment is a mirror, not a window. It
reflects feelings, not facts. And those feelings are soaked in the red and blue
of America’s political divide.
Don’t forget how often these numbers contradict actual
economic performance. In recent months, consumer sentiment plunged to some of
the lowest levels in decades—even lower than during the 2008 financial crisis.
And yet, the job market stayed strong, wages rose, and consumer spending
remained steady. How does that make sense? It doesn’t. But it makes headlines,
and that’s all that matters to the talking heads. If the drum makes noise,
people dance—even if it’s out of rhythm.
The whole thing is a classic case of garbage in, garbage
out. If your method of collecting data is flawed, then your results are
worthless. And calling up a tiny slice of older Americans who happen to still
have landlines is not just flawed—it’s laughable. Who exactly are we listening
to? Grandma Edna in Kansas who watches Fox News all day? Uncle Jimmy in
Portland who’s still mad Bernie didn’t win? These are the voices shaping our
national economic mood? You’ve got to be kidding me.
I know what you’re thinking: “But haven’t they moved to
online surveys?” Yes, some have. And guess what? That only added new problems.
Now you’re dealing with internet bias—only those who are internet-savvy or who
respond to random email surveys are included. That skews the data in a
different direction. It’s like switching from AM radio to Bluetooth and
thinking the signal is clearer. A cracked mirror still shows a broken face,
no matter the lighting.
At the end of the day, consumer sentiment is a glorified
opinion poll. It changes with the news cycle, political headlines, or even a
bad tweet from a celebrity. Yet markets move because of it, policies are
defended using it, and entire economic forecasts are based on it. That’s like
betting on the stock market based on whether your horoscope said you’d meet a
tall, dark stranger. Madness.
So when you hear that consumer sentiment has risen or
fallen, remember this: it probably just means someone got mad at gas prices or
loved the last presidential speech. That’s not economics. That’s emotion. And
building economic policy around consumer sentiment is like building a house on
a cloud—looks good from far away, but try standing on it.
Consumer sentiment surveys are not sacred texts. They’re
more like Yelp reviews for the economy, left by angry customers and political
fanatics. If we keep treating them like gospel, we’ll keep making foolish
decisions. The economy is too important to be left to the emotional whims of
whoever picks up the phone.
And if you still think consumer sentiment is reliable,
I’ve got a dial-up modem to sell you.
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