Consumers are still spending, despite low confidence in the economy

As we’ve heard before, the American consumer is not feeling great about this economy.

New survey data out Tuesday from The Conference Board shows that while consumer confidence ticked up this month, it still sits below the long-term baseline, where it’s been for more than a year now. According to the survey, the main culprit is high prices that just keep rising.

Gary Hoover, an economics professor at Tulane University, said he likes to eat a small cake or pie for dessert at lunch every day. Those used to cost 84 cents a piece, he said. Now, they’re up to 93 cents.

“I have noticed that increase, and I am upset about it,” he said.

But for now, he’s still enjoying those cakes. Consumers across the economy are still buying things — even the goods that are hit hardest by inflation, like gasoline. Hoover said in places like New Orleans, where he lives, there aren’t many other ways to get around.

“Our mass transit system isn't one that would allow for easy substitution,” he said.

Gas prices were on the mind of Ted Rossman, based in New York City as a principal analyst with Bankrate.

“I filled up yesterday and it was about $60 to fill up the family SUV,” he said. “I mean, that's noticeably higher than it used to be.”

Rossman said he’s been thinking about ways to save on gas, like combining errands, but hasn’t really implemented them yet. And that’s the paradox of the American consumer.

“People are not feeling great, but yet they're spending anyway,” Rossman said. “It's been really one of the biggest puzzling factors in the economy the past few years, and we really haven't seen that change.”

One explanation, said The Conference Board chief economist Dana Peterson, is the labor market. Even though there’s not a ton of hiring, overall unemployment remains low.

“As long as people are working, they're getting income and they are still spending,” Peterson said.

They just might not be happy about it.