Consumer Confidence: Expectations Are Meaningless

The consumer confidence index is a measure that gets way more attention than it deserves. It is has two components, a current conditions index and a futures expectations index.

While the current condition index tends to be a good measure of consumer spending, it has little predictive power. In other words, if the June reading is high, then June will probably be a good month, but it doesn't tell us much about July and August.

On the other hand, the future expectations index is erratic and prov...