Wednesday morning’s airing of NBC’s Today included a segment exploring the purported rise of consumer confidence in May. The show’s hosts were joined by senior business correspondent Christine Romans, who broke down the contributing factors and came to the conclusion that people were acting confidently through their spending, while simultaneously not taking into account that goods and services cost more due to inflation.
Romans began by firmly stating that “a very strong job market is really supporting people's finances here.” She cited examples of people’s intentions to make larger purchases, like cars and appliances, adding that “Those are things that suggest you have confidence in your paycheck.” According to her analysis, the labor market was most significantly affecting the increase in consumer confidence.
Following a short discussion of the housing market and interest rates as related to the confidence number, things started to unravel when Romans then considered the problem of affordability and complaints regarding excessive costs for basic necessities.
As if completely forgetting basic human necessities that require spending, Romans inaccurately presented the inconsistency of people who, while hesitant about the economy, would not stop spending, which she interpreted as a pretense of confidence:
And they just feel like they're being nickeled and dimed. So, affordability is still a problem here. I've been going to swing states talking to people from — who clean hotel rooms to small business owners all up and down the job spectrum. And people say and they do different things. They say they feel lousy about the economy, but they're spending.
“They're spending their money and so they’re acting as if they have confidence in their job and they have confidence in the economy, but they're saying they feel really lousy,” she asserted.
Romans continued to portray the public as the ones sending mixed signals about the economy:
So there's this anxiety disconnect that I think has been the story of the post-Covid economy. And we'll see how that plays out, you know, five months, six months into an election, how do people really feel about the economy. They're doing one thing, they're saying another.
The confusion of her arguments was also evident in her earlier statement regarding big purchases as clear proof of growing assurance in paychecks. Her understanding reflected failure to consider the fact that the basic necessities were more expensive, thus an increase in spending was not a sign of confidence.
The transcript is below. Click "expand" to read:
NBC’s Today
5/29/2024
07:13:44
CRAIG MELVIN: Folks, there's some positive news for the economy this morning. Consumer confidence rising in May for the first time in three months, signaling that Americans are feeling better about where things stand, but there are some lingering areas of concern when it comes to your wallet. NBC's senior business correspondent Christine Romans here to break it all down for us. Christine, always good to see you.
CHRISTINE ROMANS: Good morning.
MELVIN: It's usually a mixed bag with you, Christine.
ROMANS: Yep.
MELVIN: There's a little good news, there's a little not, so good news. So let's start with the good news. Consumer confidence up in May. What does that tell you about where we are right now?
CHRISTINE ROMANS: It tells me that the job market — a very strong job market — is really supporting people's finances here. When you talk to people in this consumer confidence report, more people said they were looking to buy a car, more people said they were looking to buy an appliance. Those are things that suggest —
HODA KOTB: Mmmm.
ROMANS: — you have confidence in your paycheck. So, you saw this number rise, and it really is showing you the labor market is underpinning everything here. Also stock markets hitting record highs —
KOTB: Mmhmm.
ROMANS: — so people who have investments in their 401(k)s, at least on paper they're feeling a little bit better here. And you saw that in that number I think.
SAVANNAH GUTHRIE: Let's talk about the housing market —
KOTB: Mmhmm.
GUTHRIE: — because it's sluggish —
ROMANS: Yeah.
GUTHRIE: — and the interest rates continue to dog it.
KOTB: Mmhmm.
ROMANS: And in that consumer confidence number, that was one thing that people said was a problem. They thought that interest rates were too high, and they didn't think they were going to come down anytime soon. You have mortgage rates that are now back below seven percent for the housing market. So that's good if you're trying to get in there, 6.94%. But there's just not — there — there's not enough —
GUTHRIE: People are used to three percent! Yeah.
ROMANS: — I know! And there's not enough houses on the market. You still have inventory. Just, there are more people who want to buy a house than there are houses on the market. So that is the real disconnect in the housing market. But you’re starting to see some energy in the urban areas. People are — want — getting in there, trying to buy homes again. Again, there's not enough supply in the market.
KOTB: So, confidence is on the rise, and that's a good thing.
ROMANS: Yeah.
KOTB: But what about what Americans are actually seeing in their bank accounts? How is that changing?
ROMANS: You know, affordability —
KOTB: Yeah.
ROMANS: — is a real problem here. People look at child care.
KOTB: Yeah.
ROMANS: They look at health care costs. They look at all these things in their life: home insurance, you know, car insurance, all these other things that have been going up. And they just feel like they're being nickelled and dimed. So, affordability is still a problem here. I've been going to swing states talking to people from — who clean hotel rooms to small business owners —
MELVIN: Yeah.
ROMANS: — all up and down the job spectrum. And people say and they do different things. They say they feel lousy about the economy, but they're spending.
MELVIN: Right. [LAUGHING]
HOTB: Mmhmm.
ROMANS: They're spending their money and so they’re acting as if they have confidence —
HOTB: Mmhmm.
ROMANS:— in their job and they have confidence in the economy, but they're saying they feel really lousy.
MELVIN: Mmm.
ROMANS: So there's this anxiety disconnect —
MELVIN: Yeah.
ROMANS: — that I think has been the story of the post-Covid economy. And we'll see how that plays out, you know, five months, six months —
MELVIN: Yeah.
ROMANS: — into an election, how do people really feel about the economy. They're doing one thing, they're saying another.
KOTB: Saying another. Okay.
MELVIN: That would also explain why credit card debt is so high right now.
KOTB: Yeah.
ROMANS: Exactly. Exactly.
KOTB: Yeah.
MELVIN: Thank you, Christine.
KOTB: Thanks, Christine.
GUTHRIE: Thank you.
(...)
