Consumer sentiment hits all-time low.
ANN ARBOR, Mich. —The U.S. Index of Consumer Sentiment is down 14.4% from May to an all-time low of 50 (out of 100) since the survey stared tracking its results in 1952.
“Consumers across income, age, education, geographic region, political affiliation, stockholding and homeownership status all posted large declines,” according to Survey of Consumer Director Joanne Hsu.
- The reading is comparable to the dip during the 1980 recession. In May 1980, the sentiment reading hit 51.7, according to historical data.
- About 79% of consumers expected bad times in the year ahead for business conditions, the highest since 2009.
- Inflation continued to be of paramount concern to consumers; 47% of consumers blamed inflation for eroding their living standards, just one point shy of the all-time high last reached during the Great Recession.
- Consumers also expressed the highest level of uncertainty over long-run inflation since 1991, continuing a sharp increase that began in 2021.
With the negative sentiment extending to consumers in all income brackets this may spell trouble ahead for retailers at all segments of the market.
“What we’re likely to see this time isn’t that consumers cut back on spending, it’s just that they spend differently. This is an environment where necessities are chewing up more and more of a household’s spendable dollars,” according to Greg McBride, Bankrate’s chief financial analyst.
Consumer Sentiment differs from the Consumer Confidence Index because it emphasizes how consumers feel about their individual household finances versus an overall look at employment and labor markets.
According to US Bancorp asset management, other differences include the period used for future expectations. The Consumer Confidence Index uses a six-month period compared with Consumer Sentiment’s one- and five-year expectation outlooks. Additionally, the Consumer Sentiment survey polls 40% repeat respondents while the Consumer Confidence Index survey engages new consumers each month.
Jean Marie Layton is senior editor for upholstery at Furniture Today. A design and furniture aficionado, she has worked as a writer/editor in industry and non-profits, in academic administration and in retail furniture sales. She pursued a master’s degree in the history of design at Parsons/Cooper-Hewitt and has a BA in history from Mount Holyoke College and an MA in liberal arts from Stanford University. Reach out to Jean Marie with your story ideas, tips and more at firstname.lastname@example.org
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