good aspect. But the disconnect between (inverted) pain and emotion (and confidence) persists.
figure 1: Michigan consumer confidence (blue, left scale) and Conference Board consumer confidence (tan, left scale), both normalized to 2021M01=0; and the Inverted Pain Index (green, right inverted scale ). The November Misery Index uses CPI instant forecasts as of December 8, 2023. NBER-defined recession peak-to-trough dates are in gray. Source: University of Michigan, via FRED, The Conference Board, BLS, NBER and author's calculations.
Note that while the Conference Board confidence index has increased since Biden took office, it remains somewhat disconnected from the misery index.
Mechanistically, this disconnect can be partly attributed to differences in the weighting of unemployment versus inflation (see here).
