Jun 25, 2026
The average American doesn’t likely need a report to tell them that the public isn’t feeling great about the state of the economy right now, but new data about citizens’ general sentiment paints an even more dismal picture than expected.
Since 1952, the University of Michigan’s Institute for Social Research has administered a monthly survey to gauge consumer confidence, putting a number on the nation’s attitude toward finances and spending, the general economic landscape at the time and anticipations for the future.
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This year, May’s results were the lowest they’ve been in the study’s recorded history, coming in at 44.8 — lower than during the worst of COVID-19 (when the index reached 71.8), the midst of post-pandemic inflation (when it dropped to 50) and after the peak of the Great Recession (when it measured 55.3).
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But how is this figure possible when stock markets have been rallying to record highs and spending across the country continues to show similar vigor?
Where the math isn’t showing the whole context
The Michigan Consumer Sentiment Index (MCSI) is widely considered to be not only a credible metric, but one of the nation’s key economic indicators. But, in this case, it seems to be at odds with other comparable and contextual data.
Regardless of what letter shape you believe the economy is taking at the moment — K or E — consumer spending levels are strong and escalating, up 0.9% month-over-month in May (the fourth monthly increase in a row) despite prices being up 4.2% year-over-year.
Yes, the difference in spending (and earnings) between classes is becoming more pronounced, which isn’t exactly an uplifting phenomenon. Individual debt is high, and so are private-credit default rates. And amid all of this spending, the average personal savings rate has fallen to 2.6%, a figure that is the worst rock bottom since the 2008 financial crisis.
But, one must also take into account that the US presently has more retirees digging into savings than ever, which impacts the data. And, people actually have more liquid assets than they did pre-pandemic, amounting to about 84% of their disposable income, according to the Fed.
Meanwhile, other respected confidence benchmarks, like the one published each month by The Conference Board, have yielded much more positive results than the Michigan index. The most recent edition of that survey appraised consumer opinion at 93.1, which marks a slight decline from the month prior, but remains around the overall historical average.
That analysis, released in late May, cites “moderately less positive” feelings about business conditions and the job market, but “modest improvements in consumers’ expectations for business conditions and the labor market six months from now.”
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RIA Advisors partner Lance Roberts also recently pointed out that the hard economic data beyond consumer appetites and attitudes tells “a third story entirely,” with retail sales, corporate earnings, GDP growth and S&P 500 performance all on the rise. Part of this can be attributable to the arguably delusional AI boom, but at large, consumers’ Michigan survey responses don’t match what is actually going on.
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Could methodology be partly to blame?
Some have argued that the university’s choice to shift polling from over the phone to online in 2024 has skewed results negatively, as respondents generally prove to provide less rosy answers in online settings. But, given what research says about how polling modes impact responses, recent years’ results should actually be more truthful, as phone interviews, by nature, can prompt people to respond in an overly agreeable way.
“Surveys and behavior often part ways, and the gap usually tells you more about the survey than about the consumer,” Roberts stated in his evaluation. “The labor market, spending, earnings, and credit data all line up in the same direction. They don’t agree with the sentiment survey, but they do agree with each other.”
Beyond the change in methodology, Roberts also identifies another glaring factor: people’s vehement opposition to the “current presidential administration,” whether blind or warranted.
As outlined in earlier research regarding the differences in sentiment across political affiliations, he asserts that “the partisan gap in sentiment is now larger than the gaps by income, age, or education combined … [so] the survey isn’t measuring the economy. It’s capturing tribal loyalty, and that mechanic is a meaningful slice of the consumer sentiment disconnect we’re trying to explain.”
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Becky Robertson is a senior staff reporter at Moneywise and a lifelong writer. Along with more than a decade covering news at outlets like blogTO and Quill & Quire, she's attended writing residencies around the world. With 33 countries visited, she finds travel to be among her greatest inspirations.
