On Tuesday the Conference Board will release its monthly consumer confidence indicator, and reporters like Wolf Blitzer at CNN are waiting to breathlessly tell us how "we" consumers are "feeling."
Once again, Wolf and most of the media will get it wrong. Media reports on how Americans are feeling are based on what might be the most misunderstood consumer study in America.
For the better part of three years, we have read headlines screaming that consumer confidence is low. Reporters and their editors assume that if consumers are not "confident," we must not be feeling very good. That is a big mistake. Reporters and their producers/editors will not take the time to understand that the consumer confidence indicator (CCI) has nothing to do with how Americans really feel. Let me explain:
The CCI is a forecast designed to gauge whether U.S. consumers are planning to go out and spend money as we have in past years. Every legitimate study leads to one big conclusion: a resounding "no." Americans have absolutely no intent or desire to return to the level of spending that propped up the U.S. economy over the past 30 years. This new attitude has nothing to do with how we are "feeling," and it could keep the CCI low for years to come.
John Gerzema, a bestselling author who manages the world's largest reservoir of data on consumer attitudes, preferences and values, has summed it up better than anyone in his new book, "Spend Shift.''
American consumers, deeply touched by the Great Recession, have made a significant shift from mindless to mindful consumption. The days of owning more stuff than our McMansions can hold has passed. (Oh, McMansions are dead, too.) The era of going to discount stores for toothpaste and winding up at the register with $70 of stuff that was not on our list has faded as well.
Americans do not want to party like it's 1999 anymore. Time magazine has appropriately labeled the past 10 years "The Decade From Hell.''
"It is very likely that the first 10 years of this century will go down as the most dispiriting and disillusioning decade Americans have lived through in the post-World War II era," the magazine writes.
As consumers, we tried to shop our way to happiness -- but alas, maxing out the home equity and exceeding the limit on our credit cards only made American consumers feel worse.
So, after nearly three decades of mindless consumption, Americans have put down their Visa and MasterCard crack pipes. And guess what -- we are feeling pretty good. Gerzema and others who study the American emotional condition say Americans are happier, more confident and have a greater sense of control over our personal futures than at any other time in our lives.
When the consumer confidence index was high, Americans were unhappy and feeling out of control. Now, consumer confidence is at historic lows and Americans are feeling better.
A better survey of how consumers are feeling is the American Mood Monitor conducted by Iconoculture, a global consumer research company based in Minneapolis. In May, Iconoculture reported that people are, by and large, as happy or happier than they were two years ago. Iconoculture's Jennifer Haid reports that the key elements that make Americans happy are their personal relationships, sharing their joy with others and spending time with family.
Hear that, Wolf Blitzer? Nowhere in the study does "buying stuff" play strongly into consumers' happiness equation.
Don't get me wrong. Americans have lost confidence in government leaders, the banking system and even our religious institutions. But we are emerging from the Decade From Hell with a far greater sense of self-control. We are getting a handle on our finances by spending less, buying smarter and thinking long term. And, yes, we have adjusted our expectations -- the Great Concession.
American consumers are not waiting on government or business to show us what to do. We have become a pretty confident bunch as a result of the Great Recession. Just don't count on us to return to the mindless levels of consumption that spiked the consumer confidence indicator during the past 30 years.
Unfortunately, you will not get a sense of any of this when the confidence index is reported on Tuesday.