Every time I read a story like this one today in which “leading economists” talk about the importance of the American consumer in powering economic growth or when talking heads on TV casually note that consumption accounts for 70 percent of all economic activity here in the U.S., I think back to this data series:

I don’t know what would make anyone think that the 70 percent figure is anything but worrisome, especially with government spending accounting for another 20 percent or more. That leaves the combination of domestic investment and net exports contributing less than 10 percent (net exports being negative for quite some time), yet, economists and news anchors repeat this “consumers account for 70 percent of the economy” over and over as if it were some kind of economic law which it is certainly not.

Future historians will no doubt look back someday while scratching their heads and say, “I don’t know why on earth they would have thought that was sustainable”.

The final February data on consumer confidence is now in over at Gallup and they report that, after the American mood darkened slightly a few weeks ago, economic confidence ended with its sixth straight monthly gain as depicted below.

What’s interesting about the graphic (as well as with other similar surveys) is that we’ve been here before but have never been able to move higher.

In a separate, less frequently conducted survey at Gallup, the percentage of Americans who think the U.S. economy is growing has reached a new recovery high at 40 percent. While this is good news, it’s worth pointing out that some 46 percent of those polled say the economy is still either in recession or depression.