Surveys vs. Hard Data: The “Hot To Go” Economy
Chappell Roan opens her hit song with the lyrics:
I could be “the one”, or your new addiction
It’s all in my head but I want non-fiction
I don’t want the world, but I’ll take this city
Who can blame a girl? Call me hot, not pretty
That’s a good way of describing the economy: hot but not pretty. While the legacy media appears addicted to gloom and doom, the non-fiction version is much sunnier.
Consumer confidence is down, business leaders are worried, and headlines are awash in recession fears. Yet actual economic data stubbornly refuse to cooperate with this gloomy narrative.
Tuesday’s Conference Board consumer confidence reading plunged sharply to 95.7 in March, down from 101.0 in February, marking its lowest level since last summer. Last week, the University of Michigan’s Consumer Sentiment Index reinforced this gloomy outlook, dropping to 63.7 from February’s reading of 67.0—a sign that consumers are increasingly anxious over inflation, trade tensions, and broader policy uncertainty.
These numbers certainly feel troubling. Taken at face value, they suggest American households are bracing for economic hardship. But look closely at consumers’ actual behavior—beyond surveys—and you’ll see something very different. Despite anxiety captured by pollsters, Americans continue doing exactly what you’d expect in a healthy economy marked by plentiful jobs, rising wages, and accessible credit: spending freely and investing in major commitments like new homes.
H-O-T-T-O-G-O: New Home Sales Are Hot to Go
Consider February’s new home sales numbers. Far from retreating amid recession fears, new home sales rose 1.8 percent from January, reaching an annualized pace of 676,000 units. This marks a 5.1 percent increase over the previous year, providing clear evidence that consumer pessimism hasn’t yet translated into hesitation when it comes to major financial decisions. Median home prices moderated slightly to $414,500, reflecting improved affordability, and the supply of new homes expanded notably to 500,000 units, offering buyers more options.
Retail spending data underscores this resilience even further. February retail sales saw a robust rise of 1.0 percent in the critical “control group,” which excludes volatile sectors like automobiles, gasoline, and building materials. This measure is closely watched precisely because it reflects underlying consumer strength. Such a robust gain in February—amid fears of tariffs and rising inflation—indicates consumers remain fundamentally confident, despite the anxious responses they provide in surveys.
But it’s not just housing and retail spending that challenge recession fears. Broader economic indicators also point to a much brighter economic reality. The Chicago Fed National Activity Index (CFNAI), which aggregates 85 economic indicators, jumped into positive territory at +0.18 in February, a sharp reversal from –0.08 in January. This shift highlights meaningful, above-trend economic growth, particularly driven by manufacturing production, employment stability, and improved conditions in the housing market.
The industrial production figures released this month reinforce this narrative. Overall industrial production climbed 0.7 percent in February, strongly surpassing analyst expectations of just 0.2 percent. Manufacturing production specifically rose by 0.9 percent, powered notably by increased output in the auto sector and durable goods. If recessionary forces were truly at play, you’d expect industrial output to falter, not surge.
I Try Not to Care But It Hurts My Feelings
Even the headline-grabbing CNBC CFO Council Survey, predicting a recession by late 2025, deserves skepticism. This widely reported survey indicated that an alarming 95 percent of surveyed chief financial officers said policy uncertainty is having an impact on their decision-making making, and 75 percent are somewhat pessimistic about the economic prospects for the U.S. this year. Sixty percent are bracing for a recession in the second half of this year, and another 15 percent think a recession will hit next year.
But here’s the catch: the CFO Council Survey counts responses from just 20 executives. So, that 60 percent expecting a recession is just 12 chief financial officers. Such a small sample—while useful for anecdotal insight—can hardly represent the vast, complex, and resilient ecosystem of thousands of American businesses, both large and small, that collectively determine the economy’s trajectory.
Certainly, many business leaders remain cautious. Tariffs, inflation, and lingering trade tensions create real uncertainties. But as February’s actual economic data clearly demonstrates—home sales rising, consumers shopping, factories ramping production—this anxiety hasn’t translated into meaningful real-world economic slowdown, at least not yet.
Why this disconnect? Surveys measure feelings, and consumer sentiment surveys—like the Conference Board’s and the University of Michigan’s—are heavily influenced by transient factors, especially alarming media headlines and political drama around tariffs and spending cuts. Negative news cycles can easily create temporary dips in sentiment that don’t reflect underlying economic fundamentals.
What’s It Take to Get Your Number? Hurry Up, It’s Getting Cold
But ultimately, real economic activity—paychecks, employment, spending at stores, home purchases, factory orders—matters far more than survey responses. Americans are voting with their wallets, spending confidently despite anxiety expressed in surveys. If you pay them, they will spend, to paraphrase the line from a popular film.
This doesn’t mean caution is entirely misplaced. Inflation remains stubborn, policy uncertainty around tariffs and trade continues to weigh on some business decisions, Republican lawmakers are moving to enact tax cuts at a glacial pace, and recession risks always loom somewhere in the distance. But as long as hard data—spending, production, hiring, and homebuying—remains robust, predictions of imminent downturn remain premature.
Consumers and CFOs might express anxiety, but they’re spending and investing like the good times aren’t quite ready to end. Until actions match the words of surveys, recession talk remains precisely that: talk.
