re: confidence in u.s. economy sinks lower-abc/mon Hi...

re: confidence in u.s. economy sinks lower-abc/mon Hi sb2000,

This morning you have posted 2 pieces of commentary.

One, concerning the slump in US consumer confidence due to fears over rising gasoline prices, rising inflation, and the threat of higher interest rates.

The other, concerning moderating inflation which rose 0.2% in May, thereby suggesting that the immediate interest rate outlook remains benign.

Whether these 2 reports are consistent or not, is not a matter for debate. What is a matter for debate, however, is the extent to which any real reliance can be placed on "sentiment" based surveys which are influenced by what is happening in the immediate vicinity (or time) around you.

In other words, following the inflation rate figures being out, re-affirmation of current interest rate biases, and the outpouring of sentisment for President Reagan (and the bipartisan meeting yesterday between President's Bush and Clinton), a similar survey conducted today (being Tuesday evening in the USA, or Wednesday morning in Australia) would likely produce the mirror reverse results. Hence, the reason why such results are barely considered by policy makers, the FED, or by business, but are media fodder for newspaper headlines, or TV commentary. No wonder things happen. People don't think. Or, if they do think, they generally do not think much beyond today.

The timing of such surveys are also a bit mischievious as they seem to be conducted in the lead-up to such reports (ie: the inflation report, for instance) being issued, rather than in the wake of such reports.

Just some more food for thought.