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New surveys show Americans are increasingly pessimistic about their finances as prices rise, with consumer confidence hitting all-time lows in May.
American consumers have reached a new low in confidence, with a closely watched survey hitting all-time lows in May as households remain scarred by years of rapid price increases [1]. The pessimism comes despite cooling annual inflation rates, as a Federal Reserve report shows rising prices remain the top financial concern for 91% of U.S. adults [1][2]. Economists suggest a series of economic shocks, from the pandemic to recent geopolitical conflicts, has prevented households from recovering financially [1].
Key takeaways
While the annual rate of inflation has cooled from four-decade highs, economists note that consumers are focused on the cumulative change in prices over the past several years [1]. Cleveland Fed President Beth Hammack observed that there has been about a decade's worth of inflation in half the time, a phenomenon that PNC Financial Services analysis identified as the primary cause for the decline in consumer sentiment between 2019 and 2026 [1]. This focus on price levels has led to a spike in negative news about inflation and driven Google searches for the term to all-time highs earlier this year [1].
The Federal Reserve’s Economic Well-Being of U.S. Households survey, released May 13, confirms that 91% of adults view prices as their most common financial concern, a figure unchanged from the previous year [2]. This anxiety persists even as 73% of adults reported doing okay or living comfortably financially, consistent with 2024 levels [2]. The report also noted that the Producer Price Index jumped 6% year-over-year in April, while the Consumer Price Index rose to 3.8%, outstripping workers' earnings for the first time in three years [2].
Economists attribute the lack of confidence to a succession of disruptions, including Covid, wars, and tariffs, which have left consumers little time to recover between shocks [1]. The recent Iran war has pushed oil prices above $100 a barrel and the national average for gasoline past $4, a level that historically prompts lifestyle changes [1]. Companies are feeling the pressure, with Whirlpool reporting a "-level" decline in appliance demand and McDonald's warning of potential spending impacts due to rising gas costs [1].
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 2 outlets · Jun 11, 2026 ·
Rising living costs, particularly regarding food and rent, continue to dominate economic concerns for American households.
Consumers are increasingly concerned about job security, with the perceived probability of job loss rising and confidence in finding new employment falling.
Yes, the perceived probability that U.S. stock prices will be higher one year from now increased slightly to 38.0%.
However, this pessimism has not translated into a widespread shutdown in spending. The traditional correlation between sentiment and spending has largely broken down, as consumers have continued to spend at companies like Uber and Walt Disney [1]. This resilience is occurring against a backdrop of a "low-hire, low-fire" labor market, where government data showed expansion in April but where 15% of adults under 30 are not working and 49% live with a parent [1][2].
The divergence between record-low consumer sentiment and continued spending is creating a unique economic environment that investors are navigating by monitoring the direction of confidence indexes rather than pre-pandemic comparisons [1]. While the S&P 500 has surged roughly 130% since the start of 2020, Michigan's sentiment gauge has tumbled 52% over the same period [1]. Economists suggest that for sentiment to recover, consumers would need to see "positive" and "stable" economic conditions for several quarters, a scenario currently challenged by geopolitical conflicts and trade policies [1]. Despite the gloom, analysts maintain that the U.S. consumer, responsible for roughly two-thirds of economic activity, is unlikely to crack in the near term [1].
The increased likelihood of missing a minimum debt payment is driven largely by lower-income households and those with lower educational attainment.