By Peter Navarro | RealClearMarkets | February 24, 2026
The latest Conference Board Consumer Confidence report points to an important inflection point: consumer expectations are starting to align with improving economic fundamentals. With inflation running below what many households still anticipate and growth remaining resilient, consumer confidence is beginning to firm.
The headline confidence index rose to 91.2, beating expectations. More important than the top-line number was the movement underneath it. The Expectations component — how Americans view the next six months — posted a solid gain. That is typically where economic recoveries take root. Expectations improve before spending accelerates.
One figure, however, deserves closer scrutiny: consumers still estimate inflation over the next 12 months at 4.4 percent.
Actual inflation is running considerably lower than that.
This gap between perception and reality is economically significant. It tells us that inflation expectations remain anchored to the shock of the prior price surge rather than today’s data. Households experienced a sharp and painful run-up in food, rent, energy, and other essentials. Even as the rate of price increases has moderated, the psychological imprint of that episode remains.
But expectation gaps do not persist indefinitely.