Consumer confidence is a lagging indicator

According to the Conference Board's survey of consumer confidence (top chart), released today, things deteriorated in October. The University of Michigan's survey (bottom chart), released about 10 days ago, showed a similar setback. I've never paid much attention to surveys of confidence, mainly because they tend to be lagging indicators. As these charts show, consumers are often quite happy until just before a recession starts, and quite depressed well after a recovery begins.

If there is any message to be drawn from the recent survey data, it is that the bottom in economic activity was a couple of months ago—further confirmation that the recovery started last summer.