Forget the Consumer Surveys, Businesses Say We’re in a Boom

Gloom and doom is everywhere these days — except in the economic data or in business planning meetings.

Surveys of consumers suggest that these are the worst of times. The University of Michigan’s consumer sentiment index keeps hitting all-time lows. The Economist/YouGov poll shows 63 percent of Americans say the economy is getting worse, including a third of Trump voters. Eighty-four percent of Democrats say we are either already in a recession or likely to be in one in the next 12 months.

Businesses aren’t seeing it. The Atlanta Fed released its latest Survey of Business Uncertainty on Tuesday, and the results are worth reading carefully — especially by anyone who has spent the past several months waiting for the American economy to crack under the weight of war, energy costs, and uncertainty. It has not cracked. If anything, the businesses that actually run the economy appear to be betting on something closer to expansion.

The survey’s smoothed index showed firms expecting sales revenue to grow 5.1 percent over the next 12 months in May. That number deserves some historical context. Before COVID, when the economy was humming along through what now looks like a golden era of low inflation and steady growth, the survey averaged 4.5 percent.