![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/05\/GettyImages-2274531917-e1778269638855.jpg?w=2048\")
<\/p>\n<\/p>\n
Consumer sentiment in the U.S. has officially never been worse. The University of Michigan\u2019s final April reading came in at 49.8, the lowest in the survey\u2019s 74-year-history. Three of the four lowest sentiment readings ever recorded have now happened in the past nine months.<\/p>\n
To be fair, the survey isn\u2019t without its critics. Economists have pointed out for years that the gap between what consumers say in surveys and what they actually do has widened. Gen Z economic commentator Kyla Scanlon coined the term \u201cvibecession\u201d when sentiment was grim but spending was buoyant during the Biden administration. <\/p>\n
Analysts also note that the survey can be distorted by partisanship. A 2024 Richmond Fed study found that people feel 31% better about the economy than the data would suggest if their party controls the White House.<\/p>\n
The trouble is that sentiment surveys may measure not how people feel, but which words people have learned to use to describe how they feel.<\/p>\n
Heather Long, a chief economist at Navy Federal Credit Union who made her name covering the pandemic recession, believes the sentiment data speaks to something real.<\/p>\n
\u201cAmericans are literally getting squeezed now,\u201d she told Fortune<\/em>. \u201cIt\u2019s not just a vibe, it\u2019s a financial reality.\u201d<\/p>\n American workers have remained famously resilient in the battle against five years of sticky inflation. This spring could mark a turning point. Average hourly earnings rose 3.6% over the past year, according to Friday\u2019s jobs report from the Bureau of Labor Statistics. Inflation in April is expected to come in around 4%, intensified by the U.S.-Israeli war in Iran and gas prices that have now crossed $4.55 a gallon nationally.\u00a0<\/p>\n Joseph Brusuelas, chief economist at RSM, said this week that real average hourly earnings will likely register flat to negative for April and \u201cdefinitely negative\u201d in May, once the supply shock from the Middle East war works its way through the economy.\u00a0In other words, workers are about to take a pay cut for a war most didn\u2019t ask for. <\/p>\n To be sure, retail sales are still rising, and March receipts were up 4% year over year. But the National Retail Federation\u2019s chief economist, Mark Mathews, has said that the spending is \u201cbifurcated\u201d and that higher-income households are accounting for the majority of it.<\/p>\n For lower-income Americans, the squeeze is already here. A research note released this week by the Federal Reserve Bank of New York found a \u201cK-shaped pattern at the pump,\u201d with higher-income households buying roughly the same amount of gasoline they bought before the war, while lower-income households cut back sharply, substituting public transit when available. <\/p>\n Other research from Bank of America showed the highest gap between wage growth for higher-income households versus lower- and middle-income households since 2015.\u00a0\u00a0<\/p>\n Long sees the same divide in Navy Federal\u2019s own member data, which captures spending patterns across more than 14 million households, many of them military and working-class families.<\/p>\n \u201cThere\u2019s the people who earn\u2014I\u2019d put it at $150,000 or more in New York, I\u2019d put it at $125,000 or more elsewhere\u2014there\u2019s no recession going on in their world,\u201d she said. \u201cThey continue to book their summer vacations.\u201d<\/p>\n She noted that Disney recently confirmed that its domestic park bookings and cruise reservations remained strong through the second half of 2026. \u201cThat\u2019s the $150,000-and-above crowd,\u201d Long said.\u00a0<\/p>\n Meanwhile, the bottom half of the income distribution experiences a very different reality. \u201cThe lower tier was already strained, and now it\u2019s really hard,\u201d Long said.<\/p>\n She added\u00a0she can see the uptick in more people applying for personal loans, or turning to credit cards. \u201cThey\u2019re having to use debt because they aren\u2019t making it paycheck to paycheck.\u201d That divide is what economists increasingly call the \u201cK-shaped\u201d recovery, with the top earners rising and the rest falling. As the stock market continues to reach record highs\u2014Friday marked the first time the S&P 500 touched 7,400\u2014the equity-invested rich just keep getting richer.<\/p>\n The same numbers powering that rally show capital pulling further ahead of labor. Mohamed El-Erian, chief economic adviser at Allianz, flagged Friday that the muted wage growth in the April jobs report (which is, by the way, good news for markets, because it dampens any wage-price spiral fears) also amplifies a longer-running concern: labor\u2019s share of GDP, which has been trending down for two decades and recently hit its lowest level in BLS history.<\/p>\n However, Friday\u2019s labor data, at least, dampened fears the squeeze is spiraling into a full recession. The U.S. economy added 115,000 jobs in April and unemployment held steady at 4.3%. Hiring is broader than it has been in months. <\/p>\n But the squeeze Long described happens on a different timeline than payrolls\u2014it shows up first in credit card balances, then in demand destruction for gas, in canceled vacations the lower tier never booked.<\/p>\n Before any of that, it shows up in sentiment. Sentiment could be a false flag, as some economists warn. Or it could be the first crack.<\/p>\n<\/div>\n #Americans #literally #squeezed #top #economist #wages #disappearing<\/p>\n","protected":false},"excerpt":{"rendered":" Consumer sentiment in the U.S. has officially never been worse. The University of Michigan\u2019s final April reading came in at 49.8, the lowest in the survey\u2019s 74-year-history. Three of the… <\/p>\n","protected":false},"author":1,"featured_media":2446,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[1264,797,4315,4002,4318,822,176,445,430,329,4316,4317,187,1927,446],"class_list":["post-2445","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-americans","tag-compensation","tag-consumer-sentiment","tag-consumer-spending","tag-disappearing","tag-economist","tag-inflation","tag-iran","tag-jobs","tag-labor","tag-literally","tag-squeezed","tag-top","tag-wages","tag-war"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/2445","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2445"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/2445\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/2446"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}