Walmart’s prime executives needed to giggle as they ready to debate their newest earnings with analysts, chief govt Doug McMillon admitted final week. The conflicting anecdotes the US retailer was about to share about client demand — again to high school backpacks flying off the cabinets even because it needed to slash costs to clear extra inventory and its poorest clients traded down from beef to beans — appeared like a Rorschach take a look at of financial interpretations.

But when the corporate that sells extra items to extra Individuals than some other is struggling to interpret the patron temper, spare a thought for these parsing such snippets for clues as as to whether or not inflation is tipping the US right into a recession.

Shopper confidence surveys, normally a dependable supply of advance warning on which method spending is heading, couldn’t paint a way more dire image of the outlook because the Federal Reserve scrambles to tame rising costs. The College of Michigan’s index of client sentiment hit a file low in June as inflation topped 9 per cent. Even after a slight rally, it nonetheless suggests that customers are extra gloomy now than they had been throughout the worst of the Covid-19 pandemic, the worldwide monetary disaster or some other second for the reason that sequence started in 1952. Different surveys help this pattern, with McKinsey discovering twice the variety of financial pessimists in July as in March.

But this pessimism is just not displaying up within the gross sales story being advised by Walmart and its rivals. For all of the proof that prime petrol and grocery costs are squeezing these with the tightest budgets, or that pandemic-weary Individuals now prize holidays over house items, the retailers’ figures recommend that spending stays strikingly strong.

Given all that has been thrown at them, together with rising mortgage charges, Dwelling Depot’s clients have been “extremely resilient”, the DIY chain remarked because it reported file gross sales. “Reasonably than seeing [them] commerce down, in lots of instances, we’re seeing the alternative,” famous Lowe’s, its rival.

Even Goal, which has been stricken by stock troubles, continues to be producing gross sales development. The business leaders will not be alone: US retail gross sales rose greater than anticipated in July, as soon as gasoline and automobile purchases had been stripped out. Individuals are getting much less for his or her {dollars}, however they’re nonetheless spending them.

That procuring basket-half-full message has been echoed by executives from Visa and Mastercard to Common Motors and Starbucks this earnings season. “Shopper sentiment is all around the map . . . However now we have a lot extra demand,” noticed Tesla’s Elon Musk.

Inflation, it appears, has severely affected shoppers’ morale however has but to have an effect on their precise shopping for behaviour to something like the identical extent. “Whereas client sentiment is now firmly in recession territory, shoppers will not be following by means of on their emotions,” Jefferies economists Aneta Markowska and Thomas Simons wrote final week.

Greg Daco, chief economist at EY-Parthenon, says that had he seen such weak confidence previously, he would count on a 10-15 per cent drop in spending. Greater than ever earlier than, he concludes, we have to watch what shoppers do, not what they are saying.

However why ought to sentiment have turn out to be a much less dependable information to spending? The clearest rationalization is what John Leer, chief economist of knowledge group Morning Seek the advice of, calls an unprecedented divergence between inflation and unemployment. At the same time as small enterprise optimism scrapes recession-like ranges, unemployment stays close to file lows.

The stimulus funds which helped employers hold workers on additionally allowed shoppers to shore up their financial savings. US households have twice as a lot money at hand as they did on the finish of 2019, McKinsey famous.

Not all households, after all. Break down the headline figures and you discover, unsurprisingly, that sentiment has fallen the furthest among the many beef-to-beans earnings group. Older Individuals, who’ve suffered the worst within the pandemic and know what inflation can do, are additionally disproportionately pessimistic.

Polls present that Republicans, whose views of the economic system had been far rosier than Democrats’ by means of the Trump period, now see a dramatically darker outlook, and vice versa. And if the nation’s partisan divides are souring the temper, so are geopolitical headlines.

Shoppers, Leer notes, reply quicker to dangerous information than good. Even non-drivers rapidly registered the sudden improve in petrol prices after Russia invaded Ukraine, for instance, whereas the gradual return to pre-invasion costs has not quelled their issues.

That means that even when policymakers can tame inflation it could not produce the swift increase to shoppers’ temper that many firms — and the Biden administration — hope for. It is usually a reminder that client confidence had not recovered from the shock of Covid-19 earlier than it was examined once more by the steepest inflation in a long time.

It’s turning into clear that the back-to-back blows of the pandemic and inflation have left a long-lasting mark on Individuals’ financial confidence. But low unemployment and excessive financial savings ranges level to US shoppers’ spending remaining extra strong than the surveys capturing their anxious temper would indicate. Even so, there are different causes to fret a few much less assured America.

andrew.edgecliffe-johnson@ft.com