Want proof that there really are people in the US living under rocks or recently returned from the moon? Check out the latest consumer confidence survey. In October, nearly a 10th of the 5,000 households surveyed said that business conditions are good at the moment. A full half reckoned things are normal. And job hunters rejoice, for 9 per cent of respondents still think employment is plentiful. Similar numbers replied that they are upbeat about the next six months as well. Indeed, more than 10 per cent of households are expecting their incomes to increase. Are there really that many insolvency lawyers out there?

Naturally, there will be much wailing about the Conference Board index being the lowest on record. Certainly, the drop of 23.4 points from September – the third biggest in the history of the series – will figure strongly as the Federal Reserve ponders its next interest rate move. But it should remember that households are as sway to blind panic as they are to prolonged periods of excessive exuberance. Only a year ago, three-quarters of respondents forecast business conditions for the following six months to hold steady, and a fifth expected to make more money.

If investors (or policymakers) really want to scare themselves, however, they should observe the long-term data. That suggests that while households today have, until recently, never had it so good, they still have no idea what a real crisis is like. Looking back three decades, peaks in consumer confidence were higher in the past 10 years than they were at any time before that (although happiness abounded in the Summer of Love in 1967). By contrast, the near doubling over the past year of households saying that conditions are bad, to 38 per cent, sounds alarming. But that is nothing compared with the 57 per cent in December 1982. Confidence has not yet even begun to crack.

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