Consumer sentiment at all-time low as pandemic-era inflation persists
The Story
According to a report by Vox, the University of Michigan’s long-running consumer sentiment survey recorded its lowest reading last month since the index began in 1952. A CNN survey this week found that only 47 percent of Americans believe most people can get ahead if they work hard, down from 67 percent a decade ago, with the decline consistent across age, race, and gender. President Donald Trump’s approval ratings on the economy have also hit new lows, with CNBC at 39 percent and CNN at 30 percent. The negative sentiment persists even as GDP growth, jobs numbers, and the stock market remain strong. The source reports that 76 percent of CNN respondents cited affordability as their biggest economic problem. New data shows inflation at its highest level in three years, partly due to energy prices from the Iran war, and producer prices rising the most since 2022. A theory by economists Jared Bernstein and Daniel Posthumus suggests that four decades of low, predictable inflation raised expectations, making the 2020s inflation feel like a betrayal that fuels the “vibe gap” between economic data and public mood.
Key Facts
- University of Michigan consumer sentiment index hit its lowest level last month since the survey began in 1952.
- CNN survey: 47% of Americans agree most people can get ahead if they work hard, compared to 67% in 2016; swing similar across age, race, and gender.
- President Trump’s economic approval: CNBC shows 39%, CNN shows 30% — both new all-time lows.
- GDP growth, jobs numbers, and stock market remain near all-time highs.
- 76% of CNN respondents named affordability or cost of living as the biggest economic problem.
- New data Tuesday: inflation at highest level in three years, partly due to Iran war energy prices.
- Inflation outpacing wage growth for the first time in three years, per economist Heather Long.
- New data Wednesday: producer prices rising the most since 2022.
- Consumer sentiment index peaked at 110 in early 2000; nadir was 53 in summer 2022; improved under Biden then crashed again under Trump due to tariffs, Iran war, and gas prices.
- Economists Jared Bernstein and Daniel Posthumus propose an expectation-based theory for the “vibe gap,” modeling that a four-decade period of low inflation raised consumer expectations, making recent inflation feel like a betrayal.
Conflicting Reports
No conflicting reports identified in the source article.
Still Unclear
No open questions identified in the source article.
Misconceptions
No widespread misconceptions addressed in the source article.
Key Figures
- Donald Trump (President)
- Jared Bernstein (economist)
- Daniel Posthumus (economist)
- Heather Long (chief economist, Navy Federal Credit Union)
Sources: vox.com
