WSJ What’s News - Why This Economist Says Government Economic Surveys Can’t Be Replaced

Episode Date: September 7, 2025

This week we’re bringing you an episode of our podcast WSJ’s Take On the Week, where co-hosts Gunjan Banerji, lead writer for Live Markets, and Telis Demos, Heard on the Street’s banking and money columnist, cut through the noise and dive into markets, the economy and finance. In this week's episode, Telis is joined by Dana M. Peterson, chief economist and leader of the Economy, Strategy & Finance Center at the Conference Board. They begin with the research group’s August consumer confidence index and whether its results mean we’re in "vibecession.” Then Peterson defends the importance of survey-based data and why revisions are necessary. And Telis asks: Could private data replace government data? Check out WSJ’s Take On the Week. Further Reading:  Consumer-Confidence Survey Slips in August Government Data Is Under Fire, but It Makes the World Go ‘Round Consumer-Confidence Survey Improved in July Trump Advisers Consider Changes to How Government Collects Jobs Data Trump’s BLS Firing Tests Wall Street’s Reliance on Government Data Learn more about your ad choices. Visit megaphone.fm/adchoices

This message comes from Viking, committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, destination-focused dining, and cultural enrichment on board and on shore. And every Viking voyage is all-inclusive with no children and no casinos. Discover more at Viking.com. Hey, what's news listeners. It's Sunday, September 7th. I'm Kate Bullivant for the Wall Street Journal. is What's News Sunday? On today's show, we're bringing you an episode of WSJ's Take On

the Week, where co-host Gungin Banerjee and Telestimos dive into markets, the economy and finance. One of the big questions on investors' minds lately is how consumers are feeling about the economy. In this episode, Dana Peterson from the conference board digs into the latest consumer confidence index and, well, it's a mixed bag. Plus, they get the importance of survey-based data after President Trump dismissed the head of the Bureau of Labor Statistics last month. Take a listen. And if you like what you hear, we've got a link to WSJ's Take On the Week in the show notes. Hi, everyone. Welcome to WSJ's Take On the Week. I'm Gunjin Banerjee. And I'm Telos. Demos. So Gunjin, it seems like the bond market is back in focus. We had a few moves this week, which really great.

grabbed everyone's attention. First of all, we had the U.S. Treasury, the 30-year U.S. Treasury bond, the long-term U.S. bond market. Those yields hit 5 percent, a level that kind of scares everybody that only rarely has been hit in recent years. Everyone freaks out when, like, yields start going crazy, right? I think the past few years we've seen these moments of turmoil in the bond market have sometimes been accompanied by volatility in the stock market, too. Absolutely. No, I think investors still have this kind of idea that the bond market is sort of smarter or kind of more long-term and kind of more perceptive in some ways in the stock market, right? The smart money. The smart money is in bonds. But you had similar moves around the world, too,

which is I think really what put it on everyone's radar. You had UK guilt's 30-year UK government bonds known as guilds. Those were hitting their highest level since 1998, those yields. And then you saw the same jitters in France and Japan, too. Those yields hit multi-decade highs. What's going on? Why is the bond market doing this? Do we know? I feel like there's a lot of things happening in the bond market right now. You know, domestically, there are some concerns about federal reserve independence with, you know, President Trump attempting to fire Lisa Cook. We're seeing that play out right now. She's filing a suit against the government saying, hey, you can't fire me. The Justice Department is opening an investigation into her.

So it feels like that's driving a lot of the volatility in the market recently. And it hasn't even been that jarring yet. I think we may still see more volatility stemming from concerns about federal reserve independence. You know, if that is tarnished, that could lead to higher inflation, could lead to, you know, more volatility in bond yields. And it's literally something that affects every investor on the planet. And I guess the fear there, just kind of putting myself in the market's frame of mind, is that if the Fed is in the future going to be an extension of the president, right, then, you know, when the president wants rates to come down, then, you know, the market. it's feeling is that like, well, then the Fed will not act judiciously to slow the economy when things are running too hot. You'll have inflation. And that will sort of, you know, the money that

you're being paid back on those long-term fixed bonds, you're not getting paid back the same dollars because the currency has been debased. And you've seen corresponding moves in gold, right? Gold hit another all-time high this past week. Some bulls were now talking about $5,000 an ounce. It's now around like $3,500 or so just for context. So that's like another. huge move there. Tariffs are in the news because the trade court decision ruling that President Trump's reciprocal tariffs were basically an sort of illegal use of his power. And an appeals court upheld that. President Trump wants to take that to the Supreme Court. Does that have a link to what's going on in the bond market too? I think a lot of people are still waiting to see the extent to which

tariffs will ripple through inflation. We might get more on that in the coming week with CPI data. and I think it's showing up in some subtle ways that people may not be watching. I was reading that worldwide, the average cost of shipping a 40-foot container has fallen for 11 consecutive weeks to around $2,100. This signals a shift in behavior among all these different parties. And so that means what, that the people are not importing as much? Yeah, it's really changing how they do business because of tariffs? Yeah, it shows that people are being more cautious about how they're now.

navigating this time. And that even though, you know, on a headline level, we're not seeing this big jump in inflation, these tariffs are impacting businesses. They're impacting manufacturers and retailers. Meanwhile, of course, we have the stock market that that little neighbor of the bond market. And, you know, the stock market has, you know, sort of churned along. I don't think really any of the moves lately have been of a kind of huge shift in sentiment. A little September volatility. I think we started with after Labor Day. And people do expect this to be kind of a rocky month, typically. And you've pointed out that September is often a tough time for stocks, right? That's historically the case. Yeah, there can be, it can be one of the most

volatile months. I think the autumn months typically are. Well, the consumer is, of course, in focus, as always in the stock market. And we had some recent retail reports that were kind of interesting, right, I guess. You know, the journal had this great article about how the middle class consumer is feeling squeezed right now. And we saw that in Cole's recent earnings report where their leaders said, hey, people are trading down to cheaper products and their lower and middle-income consumers are really feeling crunched right now. And you saw the boost in Dollar Tree sales, right? Dollar Tree being like the, basically the cheapest place you can go to shop.

So that's always kind of what people expect to see there. Yeah, that's like a recession indicator almost, right, when Dollar Tree is doing really well. So, of course, all this brings us to consumer sentiment, consumer confidence. How is the consumer feeling about the economy right now? we had the most recent update from the conference board, which is a think tank for business leaders, and they have a widely followed confidence measure. And their August report was mixed, right? They said, quote, rising worries about jobs and income offset more optimistic views of current and future business conditions, right? So their kind of headline index is about where it's been over the last few years, which was lower than it was at kind of that post-pendemic peak of confidence. but also well above where it was during those like 2010 great recession kind of lows were, right? So like it's about kind of average, I'd say, in recent years. I have this thesis that the stock market is more important for sentiment than it's ever been before.

And tell us you and I have talked about this, how stock holdings as a share of financial assets, household net worths are at records and just makes me wonder, right? Does that mean that the stock market at a record means that all these 401K million, that empowers them to spend. It makes them feel better about the market. So I feel like there is more of a feedback loop between the stock market sentiment and spending than there might have been in the past. So all of that positivity sometimes doesn't show up in the data, right?

The journal had a recent survey of its own. And they talked to some people who've looked at confidence and said that you would think that based on where the stock market is that people would feel confident. And like you saw, you know, like I said, in the conference board, you know, people think business conditions are improving, right? And part of that is the stock market. But again, you still have some data, especially the sort of the Michigan sort of index showing sentiment being very low. So I just think there's a bit of a mystery or a disconnect. And I'm having trouble kind of sorting out what is actually going on with the consumer.

Because, you know, people are buying the stock market's up. The job market is mostly pretty good, but sentiment is down by some measures, but not by others. So I called in an expert. Your phone to friend. Phone to friend. Our guest this week is Dana Peterson. She is a – she did economic research at Citigroup for a long time, and now she is the chief economist at the conference board. And she's going to help us figure out what's going on in consumer conference and explain some of these ups and downs and disconnects and really just talk through why we also talk about consumer.

confidence so much, what it means for investors, and also, you know, how we should think about survey data these days. And we're going to have that when we come back after the break. Viking committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, cultural enrichment, and all-inclusive fares. Discover more at viking.com. So I'm here today with Dana Peterson. She is the chief economist and leader of the economy strategy and finance center at the conference board.

Dana, welcome to the show. Thanks so much for having me. One thing I noticed was that people are getting more optimistic about like what you guys term business conditions, but they were getting a little more pessimistic about things like job availability. Do people feel like the overall economy is good but not for them? Help us kind of read through some of these kind of conflicting signals. There are a few people who think we are in a recession, but as you said, there are many who still think that there might be a recession at some point over the next 12 months.

But they are seeing stock markets rise and they associate that with business conditions improving. When it comes to themselves, yes, they are very worried about jobs. Certainly when you look at the number of jobs that are available from the Jolt's data, there's really not that much. But we have to understand that when the economy is at full employment, you're not going to have a lot of hiring or a lot of job openings, but you're also not going to see a lot of firing or quitting. And so those are good dynamics, but still, when consumers see things like payroll slowing over the course of the last few months, they conflate that with their own job prospects. But the interesting thing is that they do believe that their incomes are still very, very good. And also, many people believe that their personal finances are in good shape, not only now, but will continue to be.

What's the real story on inflation? Is it something that is really kind of picking up and changing how people behave? Or is it really not something we see yet in the economy? For consumers, it's probably a little less about inflation, but the price level. So even though prices are not rising as quickly as they did over the last few years, the level of prices they're still very high. It's still the case that, you know, bread maybe $10, whereas a few years ago it was five. And now even a slight increase, a two and a half percent increase, you know, that hurts. And then consumers see and feel that. And so I think a lot of discomfort is that they

know that tariffs induce inflation and that inflation means that higher, prices will be higher on top of where they already are. So I wanted to go back a little bit and talk about this idea of the vibe session. You know, we had Kyla Scanlan on this show. She was the economic commentator who coined that term. And it's a widely kind of talked about phenomenon, which is that while the economy is mostly doing okay, price growth has slowed, people don't feel good about the economy. But in the conference boards indicators versus those that are put out by the University of

Michigan's, their consumer sentiment survey, the conference sports indicators never really looked that bad even in the 22, 23 years? What does that tell us about the vibe session? Was there really such a thing in your view? I think there was a vibe session. And the biggest difference between our measure and the University of Michigan's, at least the overall measure, are the components. So, for example, their overall measure has more components that point to inflation and recession, whereas our headline has components that allude to the labor market, business conditions, and income. No inflation.

But we do have inflation measures, and certainly all those measures spiked over the last few years because consumers were filling inflation. And also, they complained a lot in their write-ins about inflation. Nonetheless, our measure did not fall because, while consumers may have had mixed feelings about business conditions, they were still working. So the labor market was still in very good shape for them. And also, their incomes are rising. And again, a lot of that's due to the fact that we had labor shortages and also lots of people retiring. And so companies were doing whatever they can, throwing money at their workers to attract really great talent and also

to keep the talent they had. It seems like tariffs are really central to consumers' perceptions of the economy right now. And so when you say we're not in a vibe session anymore, I guess part of what you're saying is that consumers have a serious concern about how tariffs will impact both prices and also maybe their job prospects. Absolutely, yes.

Consumers understand that tariffs are not paid by foreign countries, but ultimately it's paid by them. And companies are saying, and they are actually doing, that they're going to, to pass those higher costs onto whoever's next in the pipeline. And ultimately, it lands at the feed of consumers.

So consumers understand that, and they remember that from 2018 and 2019. And so consumers are buying fewer durable goods that are imported. They're focusing more necessary services, such as financial insurance or car insurance or even pet care. You have to feed your pets. But they're spending less on highly discretionary types of services. And businesses look at that and they see demand destruction. And businesses still need to make their profits.

So ultimately, that may mean in terms of after they pass the higher costs on cutting costs internally, which could mean labor. So let's say that tariffs don't have that effect. When will consumers maybe start to feel better about the economy if these things don't kind of materialize? Well, we have to remember that there are tariffs in place. There's a 10% tariff on everything, and certain countries have even higher tariffs. So it's already there, and companies are passing those costs along, and they probably will continue to do so. Once we have a better clarity on what the tariffs looks like against all economies, it could be, on average, slightly higher than where we are now. And I think also people have been lulled into a sense of calm because many of the tariffs have been delayed.

So at some point, this is going to end, and it is going to land inflation. But let's say that, you know, the labor market still holds up. Then I think consumers will start to feel a little bit better. But again, you know, in terms of making up for lost consumption and also business investment, that's difficult to do. And indeed, even if businesses do invest more in building out factories and pipelines and supply chains within the U.S., that takes a while. It takes five to ten years to build a chip factory. So that's not something that we're going to see returns on in the short run. So I think a lot of it has to do with timing.

And then also, let's not forget about the budget bill, where the budget bill is anticipated to provide maybe a tenth or two in terms of growth in 2026. But in 2027, and even at the end of 2026, it starts to weigh on the economy, where consumers who may have been receiving. no taxes on tips, well, maybe they were also receiving social benefits, and those things are going to be cut. So I think there's a lot of uncertainty. Why does consumer confidence or consumer sentiment matter? Why is it an indicator that we should be paying attention to and building into our predictions for the market or the economy? Why should investors overall care about consumer

confidence? We certainly talk about it a lot, but I'm not sure I understand exactly what it's sort of most useful for as an indicator. I guess it goes back to what, how, and for whom, what are you making, how are you going to make it, and who's going to buy it? And the key thing for corporations. Classic college economics, right? Yes, that was the first day of Econ 101. But if there's no one to buy your product, then there's no point in making it and there's no point in having a company. And so consumer-facing companies or even companies that, you know, are intermediaries need to understand what consumers are thinking. Sometimes what they think doesn't match what they do.

And that's why I suggest that people just don't look at the headline, but look in the details. So, for example, like you said, our measure didn't really move that much when inflation was raging. But again, you know, people were employed. And so if consumers are fearing their jobs or their employment, then they tend to pull back. That is real. And they start economizing. And certainly that means demand destruction for companies. And so if companies get a whiff that consumers aren't happy and that even if they're not

being let go, but they're holding back on spending, then that impacts their bottom lines. Not every index, even in our own survey, is necessarily leading. Some of them are a reactionary. But a number of measures have shown that when consumer confidence does crater and also it's linked to the labor market that that portends slower economic growth in the future. So the forward picture for sentiment sounds like it might be kind of complicated, right? On the one hand, you've got inflation expectations that might tick up and that might drive some indicators, whereas, you know, the labor market, whether we get a good or bad jobs report,

I mean, that might tell a different story for some of your indicators. So what do you think we might see play out over the next, you know, the next couple of indicator releases? Yes. Just thinking about Michigan, again, their headline contains a number of indicators that relate to inflation. And we saw in the most recent inflation reading for personal consumption expenditures that inflation is rising, both overall and also less volatile components like food and energy.

And indeed, when we look where inflation is rising, it's. it's definitely rising among goods, especially those goods that would be important for them abroad. So I would imagine that that might put downward pressure on Michigan's measure. For our measure, again, our headline does not include inflation. Adverse job market data could cause our measure to weaken at the end of September because consumers will perceive that as a signal that companies are now looking to let people go and they might be next.

Dana, I wanted to ask you about survey-based economic data. The conference board does surveys. Lots of economic data is based on surveys. And, of course, when there were the revisions to the jobs report, President Trump and some of his allies were pretty upset about the way that economic data is collected. And we have actually been having a debate for a long time about how to continue doing good survey research in an age

where people don't have landlines anymore. You can't call them up in the same way. How has the Conference Board dealt with kind of changes in survey-based research? And can we still really rely on it as an economic indicator? I think what we need to understand is that revisions are the compromise for getting data quickly, right? So most people want to know what's happening with retail sales, inflation, trade in real time. And so governments try to gather that data and then publish it as soon as they can. But it also means they don't have all the information because it takes time for all these surveys

to come back. And also, when you think about all the different indicators that the government produces, there are hundreds, maybe even thousands of people who are all playing a role in gathering that data, then cleaning it, removing outliers and making sure it's seasonally adjusted properly and then testing it to make sure that it's telling the proper story before it gets released. And you can only do so much of that in a month or even a week's time. And so if markets want to have data that's, you know, comes out on a high-frequency basis, they have to know that there's likelihood of revisions.

How have you changed what you do to make sure that you're still reaching the number of people that you can, that you need to, you know, efficiently? Yes. Well, we have switched from paper and phone surveys to online surveys, but we also will pay survey vendors to ensure that we have the right number of responses and that those responses are representative of the demographics of the United States. So there's a lot of effort that goes in. And then once we get the data back, we still have to clean it and make sure that it's accurate in telling the proper story and that the story is consistent with

historical data. And so, yes, you must advance in terms of your technology and the ways that you collect data, but there's also a lot of high-tech going on and making sure that data, once it reaches your mailbox or your data redistributor, that is correct. And so there's no easy way to produce data, but we need to take the time and the care to make sure that the data are believable and accurate. Some people have suggested that we switch to more kind of private measures of the economy, right? Companies that collect a lot of data about, you know, how many people are looking for jobs, you know, might be doing, you know, might be typing Google searches for, you know, find me a job, things like that. Do you think that that could replace government

data at any point in the near future, or is there something different about the way that the government collects data that still makes it the benchmark, you know, even if it has to modernize in some ways? Well, private data are important, but oftentimes private data providers benchmark off of government indicators. And so there's still a strong place for the government. And let's also think about the scope and the scale and the cost. There's no other entity on the planet like the U.S. government that has the resources in terms of people and the dollars, the amount of money, billions of dollars to produce data, and also the ability to ensure that the data makes sense. And so there's really not a good replacement

for government data. Can it be improved? Absolutely. And always, and at all times, the BLS, the BEA, are working to improve their survey techniques and also how they clean and prepare the data for public distribution. So I think there's always room for improvement, but it would be very difficult to replace the service that the government is providing in terms of giving government data that we can trust. We're going to take a quick break. And when we come back, we've got one last question for Dana Peterson of the conference board. All right, we're back. We've got one last question for Dana Peterson.

She's the chief economist at the conference board. Dana, one thing I've noticed is that when one looks at consumer sentiment and confidence data, there's actually a lot of the kind of sub-indicators within that. You have people's perceptions of the job market, of prices, of the likelihood of recession, of their personal economy versus the national economy. Of all those things, which is the one that you think is really important to pay attention to right now? What should markets and investors and economists be focused on at this very moment?

I think the labor market indicators are the most important to focus on. Again, if consumers are not confident about having a job in the future, then they will cut back on their spending, and that will also place a drag on the economy. So as long as consumers have buoyant views of their not only the labor market in general, but also their employment prospects, then we should see improvement in confidence. But if consumers believe that they're going to be laid off, then they are going to pull back, and that's going to weigh on the economy. That's very interesting, because I know, you know, I've covered kind of a lot of lending companies for a long time, and they often say the same thing. You know, you can look at

at whatever indicator you want, but it's really jobs. Jobs, if people are working, they can kind of weather things. If they're not, well, then look out below. Dana Peterson, thank you so much for joining us. This has been a very interesting conversation. Thanks for having me. And that's everything you need to know to take on your week.

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I'm Tellis Demos. And I'm Gunjin Banerjee. Until next time. You had Macy's CEO calling consumers choiceful, which I had to look up that word. Is that a word? It is a word. And it turns out, and our colleagues over at CNBC had a story about this. a couple years ago, that it's like a new CEO favorite word.

So add that to your sort of business-speak lexicon. Nearly home, isn't home where we all want to be? Reba here for Realtor.com, the pro's number one most trusted app. A dream home isn't a dream home if it comes with a nightmare commute. That's why Realtor.com has realtor. Real commute so you can search by drive time. Download the realtor.com app today because you're nearly home. Make it real with Realtor.com.

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