Real-time US stock market capitalization analysis and size classification for appropriate risk assessment and position sizing decisions. We help you understand how company size impacts volatility and expected returns in different market conditions and economic environments. We provide size analysis, volatility by market cap, and size factor returns for comprehensive coverage. Understand size impact with our comprehensive capitalization analysis and size classification tools for risk management. American consumers have remained deeply pessimistic about the economy for an extended period, with the University of Michigan Surveys of Consumers hitting all-time lows in May, according to a preliminary reading released last week. Economists point to lingering scars from rapid price increases and a series of economic disruptions—from the Covid pandemic to wars and tariffs—that have eroded household confidence.
Live News
- The University of Michigan Surveys of Consumers hit all-time lows in May, with a preliminary reading released last week underscoring deep consumer pessimism.
- Multiple consumer sentiment surveys indicate that confidence has not rebounded to pre-pandemic levels more than six years after the initial Covid shock.
- Economists highlight that consumers remain affected by years of rapid price increases, despite recent cooling in annual inflation rates.
- A series of economic disruptions—including the pandemic, geopolitical conflicts, and tariff policies—have contributed to sustained negative sentiment.
- The Conference Board's senior economist Yelena Shulyatyeva noted that consumers have not had a break from these shocks, limiting recovery in confidence.
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Key Highlights
The University of Michigan Surveys of Consumers, a closely watched bellwether of economic sentiment, recorded its lowest-ever preliminary reading in May, released just last week. This is just one of several consumer opinion surveys showing that Americans have never fully regained confidence in the U.S. economy since the Covid pandemic struck more than six years ago.
Economists told CNBC that consumers remain scarred from years of rapid price increases, even as the annual inflation rate cools. On top of that, Americans are worn out by a salvo of economic disruptions—from Covid to wars to President Donald Trump's tariffs—that have defined the current decade.
"It's a series of shocks," said Yelena Shulyatyeva, senior economist at the Conference Board, which conducts another popular gauge of economic confidence. "Consumers don't get a break."
The prolonged pessimism raises questions among economists and monetary policymakers about when—or even if—households will ever feel financially better off.
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Expert Insights
The persistent consumer pessimism may have broad implications for economic growth and policy direction. Consumer spending drives a significant portion of U.S. economic activity, and prolonged low confidence could potentially weigh on spending patterns. However, economists caution that sentiment does not always directly translate into behavior; actual spending data may diverge from survey readings.
The fact that multiple independent surveys are showing similar trends suggests a genuine underlying issue rather than a statistical anomaly. Key factors cited include the cumulative effect of price increases over several years, even as headline inflation moderates. Consumers may be comparing current prices to pre-pandemic levels, leading to a persistent sense of financial strain.
Looking ahead, the trajectory of consumer confidence could be influenced by several factors: further inflation moderation, labor market conditions, and the resolution of trade and tariff uncertainties. Monetary policymakers may take these sentiment readings into account when assessing the broader economic outlook, though the Federal Reserve typically focuses on hard data like employment and inflation rather than survey-based measures. Without a sustained period of stability and real income growth, consumer optimism may remain elusive.
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