Who cares that the economy is shrinking at a 6.1% annualized rate? Consumer spending was up 2.2% in the quarter. And since the entire economy is structured in such a way that we need consumers to live hand to mouth, saving very little, this is good news, and probably why the market isn’t tanking this morning.
Why are they spending more? Well, there’s definitely been an increase in consumer sentiment, as evidenced by the Michigan survey that came out yesterday.
And all the pessimists are so worried about the end of the world that they figure: well, might as well spend and enjoy American prosperity before the Dmitry Orlovs of the world are proven correct.