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American consumers have grown increasingly pessimistic, and the sentiment hasn’t budged despite cooler inflation readings and record stock market highs.

Economists are now asking whether households will ever truly feel financially secure again.

The University of Michigan’s closely watched consumer sentiment index hit new all-time lows in May, underscoring just how sour Americans feel about their financial outlook.

It’s been more than six years since the pandemic disrupted the economy, yet the mood of the average household remains stuck in a funk.

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Economists say years of relentless price increases have left deep scars on consumer psychology. Even though the official inflation rate has slowed considerably, the damage has already been done.

The cost of everyday essentials is still far higher than just a few years ago, and that reality is what most households experience at the checkout line.

Yelena Shulyatyeva, a senior economist at the Conference Board, described it aptly: “It’s a series of shocks. Consumers don’t get a break.”

From COVID-19 to global wars and supply chain breakdowns, to rolling policy disruptions, many Americans feel like the hits never stop coming.

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Cleveland Fed President Beth Hammack put it bluntly: “There’s been about a decade’s worth of inflation in half the time.” Even as the Federal Reserve points to progress toward its 2 percent target, consumers see their grocery bills and utility costs as stubbornly elevated.

Economic commentator Kyla Scanlon called the constant pessimism a “vibecession”, the perception that the economy is worse than it really is.

“People are starting to hear that inflation is going down, but their box of cereal is still really expensive. That feels really, really bad,” she said.

A data analysis from PNC Financial Services reinforces that picture. Between 2019 and 2026, nearly all of the decline in consumer confidence can be linked to high prices.

According to PNC senior economist Brian LeBlanc, “No one cared about inflation until it became a problem. Now, it’s something that everybody in the country is thinking about.”

Part of the enduring negativity comes from the sheer frequency of economic disruptions. Eric Winograd, chief economist at AllianceBernstein, noted, “I can’t think of a period where you’ve had shocks like these.

To have this many sequential events is extremely unusual.” Each crisis, whether geopolitical, monetary, or policy-driven, seems to arrive before the last one can subside.

Consumers, experts say, need a prolonged stretch of calm and stability before confidence can rebuild. Georgetown University’s Francesco D’Acunto suggested that economic sentiment could improve only with “positive and stable” conditions over several quarters.

But instead of stability, Americans are watching oil prices spike over $100 a barrel and global conflicts flare up.

That volatility is taking its toll. With gas prices above $4 a gallon, consumers are cutting back. Whirlpool recently warned of “recession-level” demand for appliances, while McDonald’s CEO Chris Kempczinski told investors that higher fuel costs are denting sales. The Middle East conflict and elevated energy prices are proving to be one more anchor on household optimism.

Despite that, spending patterns tell a surprising story. Consumers may be grumpy, but they’re still opening their wallets. Companies like Uber and Disney have both reported resilient spending, suggesting sentiment and behavior have become detached.

Gregory Daco of EY-Parthenon said, “The traditional correlation between sentiment and spending has largely broken down.”

Meanwhile, Wall Street seems oblivious to Main Street’s mood. On the same day Michigan’s survey hit record lows, the S&P 500 notched an all-time high.

The index has doubled since 2020, rising roughly 130 percent, while consumer sentiment has fallen by half. It’s perhaps the clearest example of the growing disconnect between asset prices and household well-being.

Economists caution investors to focus less on pre-pandemic comparisons and more on direction. If sentiment is falling, that trend matters, even at low levels.

Winograd mused that “if this is the new normal, then this is the new normal,” implying that gloom may simply be baked into the public psyche for now.

Still, there are bright spots, particularly in employment. Federal data show job growth remains steady, with a “low-hire, low-fire” labor market keeping layoffs at bay.

As long as people remain employed, economists believe consumer resilience will hold. “It’s a foolish man who bets against the U.S. consumer,” Winograd said. “The base case has to be that the consumer continues to plug along.”

For now, Americans may still feel uneasy, but the underlying strength of the consumer could keep the economy moving forward — even if sentiment refuses to catch up with reality.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.