Why the Recent High in The Consumer Confidence Index is Scary
Why the Recent High in The Consumer Confidence Index is Scary. The Consumer Confidence Index hit another new high this month, the highest in 19 years. While one would think this is a positive, it’s actually as scary as it gets. Why? That’s because consumers typically react to what’s in the rear-view mirror. They tend to be oblivious to what lies ahead. And this herd mentality usually gets it wrong.
To put this in historical perspective, consumers are the most bullish they’ve been about the economy in two decades, since the top of the stock market internet bubble in 2000. One year later the U.S. was in a recession and the stock market was in a serious decline. Be wary when everyone is singing the same tune.