The divergence between economic expectations and reality - which is right?

 

Economists are failing with their forecasts and one of the reasons is that what is expected form the data is not matching consumer sentiment from surveys. Usually, pre-pandemic, the survey data gave us a good look at what might happen in the future. Now, we have more pessimism from surveys. The correlation or direction seems right but there is a level of caution that suggests something is wrong with consumer thinking. There is spending but it has not caused a sense of optimism. You could say that this is a carryover from the pandemic, which is true. However, saying this does not help explain the root cause or how this gap may be closed. The survey to hard data gap is something that is adding to market uncertainty. Who is to say which is right?