As we have been saying a lot on “Marketplace” lately, economic indicators are sending pretty confusing signals right now. (The kind that make a person not want to be a Federal Reserve official in charge of bringing the economy in for a “soft landing.”)​

To wit: On one hand, we have Wednesday’s update on third-quarter gross domestic product, which was revised up from 2.6% to 2.9%. One key reason was stronger consumer spending; it was up 0.6% in September, and it’s expected to be up even more when we get October’s numbers Thursday.

​On the other hand, The Conference Board reported Tuesday that its main consumer confidence index was down for the second straight month. It’s well below where it was a year ago.

​And the University of Michigan recently reported that consumer sentiment has fallen back toward the all-time low it hit this summer.

​So … we’re spending … but we feel lousy about it? What gives?

Consumers say they’re bummed, that things in the economy are going crummy. Lynn Franco at The Conference Board describes the overall attitude as “cautious, pessimistic about the future in terms of expectations — that’s been generally what we see during a recession or prior to a recession.”

Yet even after accounting for inflation, we’re still going out and buying more stuff every month. But inflation is changing our behavior, according to Joanne Hsu, director of consumer surveys at the University of Michigan. 

“Even though the aggregate numbers show really strong consumer spending, two-thirds of consumers tell us they have cut back on things with the largest price increases,” she said. “So they’re substituting away to cheaper goods.”

Also, as inflation and higher interest rates bite, there’s been a shift in who can afford to keep spending it up, per Kayla Bruun at Morning Consult. “It’s a very different story when you look at different income groups.”

It’s largely the $100,000-plus set that’s fueling higher spending, Bruun said — on big-ticket consumer items and travel. 

“Higher-income groups did manage to accumulate more savings during the pandemic, have higher incomes to begin with, so are less affected by inflation,” she said.

By contrast, for households earning $50,000 or less, “we actually see declining spending in real terms after accounting for inflation, and a lot more price sensitivity,” Bruun added. “More walking away from purchases they don’t feel they can afford.”

One thing above all is keeping consumers’ wallets open at every income level: the strong job market, said the University of Michigan’s Joanne Hsu.

“Even though they feel like this inflation situation is dire [and] they’re largely expecting a recession,” she said. “They are telling us their income expectations are strong. They don’t expect to lose their jobs.”

If consumers see clear signs of that changing, Hsu expects them to tighten their wallets pretty darn quick.