I always like to look at the various measures of consumer confidence and optimism. You'll find a nice batch of them here at that marvelous site, pollingreport.com. The TIPP indicators are above 50, which is mildly optimistic (on a 100-point scale). But the ABC News consumer comfort index is stuck in the negatives, -47 at last measure, a tick up from -49 a month ago. That scale goes from -100 to +100, so -47 kinda sucks. A little more complicated is the Consumer Board's confidence index, but it shows nice improvement and optimism of late.
Who cares? We can see the stock market is struggling to rally (Dow up 73 points as I write this) but a lot of people are carefully watching consumer spending. Until it shows up, other problems won't be solved easily, such as unemployment or tax revenues for local and state governments. What people know about the economy is in part based on their own lives, part based on what they see down the street or downtown, and in part what they consume in the media. The green shoots argument that we've hit bottom and see sprigs of life, seems to be true. Or at least as a perception.