9-15-26: The Monthly “Confidence Index” Reveals Irrational Fears

by Gary Alexander

September 15, 2026

“In every age … progressive improvement has been taking place, [but] nobody seems to reckon on any improvement in the next generation. We cannot absolutely prove that those are in error who say society has reached a turning point – that we have seen our best days. But so said all who came before us … On what principle is it that with nothing but improvement behind us, we are to expect nothing but deterioration before us?” — Thomas Babington Macaulay, writing in the Edinburgh Review (1830).

Every month, toward the end of the month, the Conference Board releases its “confidence index,” which is combination between confidence in the “Present Situation” and on “Future Expectations.”

Our response to that poll reflects a split personality. For some odd reason, the majority feel pretty good about the present, but we then turn dismal – like that Macaulay quote, above – in “Expecting nothing but deterioration before us.” This must be a factor of human psychology more than economics, or logic.

Let’s look at the latest report, released August 25, based on a survey conducted August 3 to 16. In that report, the Present Situation is bullish (at 121.2. with 100 as the baseline), but the Expectations Index is barely half that level, at 68.2 – a 53-point spread. Even worse, the two are moving in opposite directions.

According to the Conference Board, which conducts and publishes this survey, “The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—rose by 6.8 points to 121.2, The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell by 5.8 points to 68.2,” so Americans feel much better about their life today, and much worse about their future – at the same time, August 3–16, 2026. What’s that all about?

According to the Conference Board, The Consumer Confidence Index is benchmarked at 100, which was set back in 1985. Released on the last Tuesday of every month, here’s what their numbers basically mean:

• Over 100 indicates that consumers are more optimistic versus the benchmark.
• Exactly 100 indicates that consumers are neutral versus the benchmark.
• Under 100 indicates that consumers are more pessimistic versus the benchmark

With 100 being neutral, Americans think the present is great (121), but the future is filled with land mines (68). This is bizarre behavior, especially considering the fourth quarter is coming soon – the quarter when we have family holidays, football, falling leaves and rising markets. Historically, America’s stock market delivers more market gains than the other three quarters combined, especially in midterm election years.

This recent expanding division between a positive present and a dismal future is not new. This spread has dominated the last decade of the survey (below). From 2009 to 2012, in Obama’s first term, the future seemed better than the present, but that trend inverted since 2015, except for the COVID pandemic year:

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

There’s another statistical anomaly at work here. Most respondents feel pretty good about their current income and even better about their future prospects, 3-6 months from now. So…How is it possible U.S. families feel real good about their own future financial security but bad about the rest of America?

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Once again, this dichotomy represents a split personality, or “I’m OK, you’re not, you poor soul.”

In these two polls, we see a better future for us, but not the nation. Why is that? I would lay most of the blame on the media, as “Bad news sells” or (for TV), “If it bleeds, it leads.” People love to rubber-neck at roadside accidents, or watching endless videos of floods in Nepal, or airplane crashes, but those are rare anomalies. Most rivers don’t flood and 99.999% of commercial airline flights take off and land safely.

My theory is that the media keep wanting to scare us. I could take the page-1 headlines from almost any daily newspaper for evidence, but I won’t waste your time with that exercise in the obvious. You can see the evidence for yourself. Instead, I’ll turn to my favorite information media – books. I’ve read dismal financial predictions my whole life, ever since the 1950s, and I believed most of them, then, and for far too long, until 1990 when I turned bullish and formed the whimsical group “Apocaholics Anonymous.”

For as long as I’ve been in this business – since the late 1960s – the financial best-sellers have been books about the coming doomsday, so I became the run-of-the-mill profit of doom until the late 1980s, through books ranging from “The Population Bomb” and “Famine 1975” in the late 1960s, predicting hundreds of millions of deaths due to starvation by the mid-1970s, and a depletion of nearly all natural resources by 1990 (a key tenet of “Limits of Growth”). There were also religious books on “the Late Great Earth.”

All these books pointed to a dismal future, not the better conditions which thankfully evolved, driven by technological improvements (like the “Green Revolution”) creating a better (and well-fed) world to come.

When it came to the 1990s, during my belated revolution against all this nonsense, the hits kept coming:

There was no Greater Depression, or Great Bankruptcy in 1995, even though that book was all the rage in the early 1990s. In fact, we had our first string of four federal budget surpluses starting in 1997.

Why Is Confidence in the Future Retreating as the Fourth Quarter is Coming Soon?

As for timing, the latest Consumer Confidence poll – in August in a midterm election year – gave respondents a great opportunity to check into history books about previous autumn markets in mid-term election years. As this chart shows, over the last 90+ years, markets bottomed out in September and then soared an average of nearly 7% from mid-September to the end of the year, before and after election day.

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

In the face of these misleading confidence polls, September calls for common sense and rational thinking, not surrendering to scary tales of Octobers past. Recent Octobers have been great, after September lows, so it’s time to bet against the crowd of depressed respondents to confidence polls and proclaim to any and all pollsters, “The Future Looks Bright.” You will likely be among successful contrarians if you do.