According to a survey conducted in November, there were approximately 11 million available jobs in the United States, compared to 6.9 million unemployed people actively looking for work. Opportunities for Americans looking for work or looking for a job change are many, and it’s also arguably a great time to negotiate higher wages and sign-on bonuses. Indeed, a recent survey by the Conference Board found that U.S. companies are setting aside an average of 3.9% of total payroll for wage increases in 2022.

Retail spending has also been strong – the National Retail Federation expects that U.S. November-December retail sales will jump by approximately 10% from a year ago, bringing the total to as much as $850 billion or more.1

Finally, household finances are also in solid shape, in aggregate. Many households saved and paid down debt over the course of the pandemic, and total U.S. household net worth was up to $2.4 trillion by the end of the third quarter.2 By these fundamental measures, the economy appears to be in great shape.

Yet few Americans are happy about it.

In a recent poll conducted by the Associated Press, 64% of respondents described their finances as good, but only 35% felt the U.S. economy was in good shape. In October, the Gallup Economic Confidence Index dropped to levels last seen in April 20203when the global economy was in lockdown.

Two closely watched consumer sentiment measures – the University of Michigan index and the OECD confidence survey – both show a fairly steep decline in sentiment starting in the spring of 2021, with virtually no recovery since.

University of Michigan Consumer Sentiment

Source: Federal Reserve Bank of St. Louis4

OECD Consumer Confidence Survey

Source: Federal Reserve Bank of St. Louis5

Investors have followed a similar pattern. According to the American Association of Individual Investors (AAII), the past month indicates more bearish investors than bullish ones when looking out at the next six months.6

In short, there isn’t much love for the U.S. economic recovery, and the reasons why are likely obvious to many readers – supply chain disruptions, worker shortages, and rising prices for food and energy have pushed inflation to a 39-year high.7 Many services in the U.S. economy – from air travel to restaurants and hospitality – do not work as smoothly as they used to. Workers have not returned to offices, and folks spend less time socializing. A sense of normalcy remains elusive.

According to the survey director of the University of Michigan Consumer Sentiment index, Richard Curtin, persistently low consumer sentiment “reflects an emotional response, mainly from dashed hopes that the pandemic would soon end.”8 Non-stop coverage of supply chain disruptions and inflation pressures likely do not help boost sentiment either, in my view.

So, what does the somewhat dour consumer and investor mood mean for equity markets?

Probably that there is more runway for the bull market, in my view. The worst sign for stocks is when euphoria and greed grip investors and the headlines, e.g., when everyone is focused on how well stocks are doing and how much further up they’re likely to go. We are not seeing these signs today, and I would argue that inflation and Omicron variant worries have arguably tilted sentiment back into outright negative territory. Anchored sentiment can lead to short-term volatility, but looking further ahead, I think it’s a sign the wall of worry is still growing. And I view that as a positive forward indicator for stocks.

Bottom Line for Investors

The economy is largely in strong shape, but most people are unhappy about it. Indeed, what started as a year of investor and consumer enthusiasm for an economic boom has largely faded into a broad feeling of concern and disappointment. Some of the frothy signs I noticed at the beginning of the year – the SPAC boom, retail investors pouring into “meme stocks” and cryptocurrencies, etc. – have lost their luster, and the sentiment scales appear to be tipping firmly back into negative territory. Taken together, I think that means we have a very unloved economic expansion and bull market, which is usually good news for stocks.


1 Wall Street Journal. November 28, 2021.

2 Market Watch. December 11, 2021.

3 Gallup News. October 27, 2021.

4 Fred Economic Data. November 24, 2021.

5 Fred Economic Data. November 12, 2021.

6 American Association of Individual Investors. December 9, 2021.

7 Barron’s. December 11, 2021.

8 Bloomberg. November 5, 2021.®i_id=73232473&segment_id=76615&te=1&user_id=6509608d7d654ad83dc4a4bbba63f920


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