Economy Feeling Lousy, Feeling Great

Accepted economic wisdom holds that no recovery is possible without confident consumers. Their shopping sprees account for two-thirds of all business activity. So it makes sense to find out what this vital sector of the economy is up to these days. But what doesn't necessarily make sense is the answer.

Early last week, the Conference Board, the New York City-based business- research group that measures consumer confidence each month, shocked economists and politicians alike with a report that its index plummeted 4 points in February, to 46.3. That is its lowest level since 1974, when the nation was gripped by the great oil-embargo recession. The news jolted the financial markets. Even Federal Reserve Chairman Alan Greenspan called the collapse in consumer confidence "quite disturbing."

But hold on. Three days later came a similar survey, this one conducted by the University of Michigan, showing that Americans were not that depressed at all. In fact, the consumers polled by Michigan were in an upbeat mood last month, relatively speaking. In sharp contrast to the Conference Board figures, the Michigan index climbed 1.3 points, to 68.8, the highest since last November.

Economic forecasting has always been a precarious task. But the disparity between these two respected surveys makes it outright hazardous for those experts struggling to divine which poll more accurately reflects the public mood and what it says about the state of the U.S. economy.

The government may have offered them a clue late last week. The Commerce Department reported that newfound strength in consumer spending helped the nation's gross domestic product grow at an annual rate of 0.8% in the final three months of 1991, more than twice as fast as earlier estimates. While that number is still not much to cheer about, it does offer some evidence that Americans might be shaking off those recession blues. And the recovery, if it happens at all, will be something less than a surge.

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