Worst Consumer Sentiment In History: Why Now Is Worse Than 2008 | Joanne Hsu

Lowest reading in 74 years

The April preliminary index of 47.6 marks the lowest level since the survey began in 1946, falling below readings seen during the 2008 financial crisis, COVID-19 pandemic, and dot-com bubble.

Double squeeze on households

Unlike the post-pandemic period when robust labor markets offset high prices, consumers now face unprecedented strain on both incomes and expenditures simultaneously.

Methodology remains consistent

While data collection evolved from door-to-door interviews to web surveys over 80 years, the core questions measuring personal finances and business conditions have never changed.

Stock highs benefit only top earners

While equity markets approach all-time highs, the wealth effect is isolated to the top of the distribution, while lower-wealth consumers without portfolios remain weighed down by kitchen-table economics.

Labor weakness drives inequality

Labor markets are unambiguously weaker than in 2022, with elevated delinquencies and credit usage disproportionately impacting lower-income households who are pulling overall sentiment down.

Divergence between expectations and pain

While year-ahead inflation expectations have declined since 2022, the percentage of consumers citing high prices as the primary drag on personal finances has remained stuck at peak levels.

Iran conflict spiked gas fears immediately

The start of Middle East hostilities caused consumer gas price expectations to double or triple instantly and pushed short-term inflation expectations up, though long-term expectations remained relatively stable.

No front-running purchases yet

Despite short-term inflation fears, consumers are not rushing to buy durables now to avoid future price increases, indicating insufficient confidence in income stability to make major purchases.