3. If consumers are miserable, why is leisure spending on fire?

Americans seem to be having a grand old time. Leisure travel is so strong that airports can barely keep up. The movie-theater box office has already set several holiday-weekend records. Despite lingering COVID fears, hotel occupancy this summer is matching its 20-year average, and restaurants are packed.

But if you ask Americans how they’re feeling about the economy, you’d better bring a pack of tissues. Consumer sentiment has plunged to its lowest rate on record.

I’ve previously suggested that Americans have an everything is terrible, but I’m fine mentality about the economy. Asked about the state of the country, we’re lugubrious. “Things have never been worse,” we tell pollsters over and over. Asked about our own lives or finances, our mood lightens significantly.

But maybe I should give the American public a bit more credit. With plunging stock values and medium-term Treasuries, the market seems to be betting on a recession or something like it. Perhaps Americans are internalizing that message. Perhaps they intuitively sense that a recession is near, so they’re getting in their last thrills before the economy tips over.