Is the US Consumer Healthy? Sentiment Just Hit a Record Low — and Spending Keeps Rising

Research note. Figures computed from our own data pipeline — UMCSENT, OECD CCI, PCEC96, RRSFS, CES0500000003, CPIAUCSL, DRCCLACBS, CCSA, TOTALSL and PSAVERT — as of June 20, 2026. The exact methods are in How we checked it below; our editorial and AI standards are in How we use AI.

Sentiment

49.8

Spending YoY

+2.1%

Card delinq.

2.92%

Saving rate

2.6%

Next spending

Jun 25, 2026

Ask Americans how the economy is doing and they will tell you it’s a catastrophe. Consumer sentiment, as of publication, sits at 49.8 — and we mean it literally when we say that is the lowest reading in the University of Michigan survey’s entire history. Not the lowest since the pandemic, or since 2008. The lowest of all 672 months going back to 1952, below the 1980 stagflation bottom and below the depths of the financial crisis.

Then watch what those same Americans actually do. They keep spending. That’s the whole story, and it is stranger than either side of the usual argument lets on.

A personal note, since my name is on this: what pulled me into the data was how many confident recession calls this spring rested on that one survey number. I went in expecting the spending figures to show matching cracks. They weren’t there — and that gap is the most interesting thing on my screen right now.

The most pessimistic consumer in recorded history

The soft data is unambiguous, and it is grim. Michigan sentiment at 49.8 is a record low. The OECD’s consumer confidence index for the US, built on a completely different methodology, agrees — it just printed its own all-time low. Two independent surveys, two record-lows. If you only read the sentiment data, you would conclude the country is in the worst consumer recession since the Second World War.

And yet there is no recession in the spending. This is the part that should stop you.

But they won’t stop spending

Real personal consumption — the inflation-adjusted measure that actually feeds GDP — is up about +2.1% over the past year. Real retail sales are up +2.4%. Wage growth is running +3.4%, which is solid but no longer ahead of the latest CPI print at +4.2%. Credit-card delinquencies, the cleanest hard read on household stress, have fallen for seven straight quarters to 2.92% — nowhere near the 6.8% of the financial crisis, and falling, not rising. Continued claims are down about 6.6% from a year ago. Every hard series describes an expansion.

Put the mood and the money on one chart and the gap is almost comic. Index both to 100 at the start of 2021 — call it the moment the vibecession began — and they fan apart like a pair of scissors: spending climbs to roughly 118, sentiment slides to about 63. People have told pollsters things are getting worse for five straight years while spending more, in real terms, the entire time.

When does bad sentiment matter?

Sentiment still carries information. The mistake is treating a low survey print as a recession by itself. The useful test is confirmation: are people only saying they feel bad, or are they actually cutting real spending?

Three things can pull the mood away from the money. First, the price level: inflation cooled, but prices are still about 29% higher than in January 2020, and people answer “how’s the economy” by looking at a receipt, not a rate of change. Second, politics — sentiment now swings violently with which party controls the White House, in both directions, which is a tell that the survey is measuring identity as much as economics. Third, the news diet is relentlessly negative regardless of the data. None of that stops anyone from tapping a card at the checkout. So the surveys went one way and the spending went the other.

That sounds like hand-waving. It isn’t — the test is in the spending. Bad sentiment didmatter in 2008: a reading near 55 came with real consumption falling about 1.6% year-over-year, into a genuine recession. So we ran it systematically rather than picking episodes. Take the 10 lowest sentiment readings in the survey’s history and line each one up against what real spending actually did that month.

The one number that actually worries us

This is where the constructive read has to earn it. The consumer has a real soft spot, and it isn’t the mood — it’s the saving rate. Households are saving just 2.6% of their disposable income, which sits in the bottom 3% of every reading since 1959. The spending is real, but a growing share of it is being funded by saving less rather than earning more.

That is what makes the consumer resilient and fragile at the same time. Resilient because spending has real momentum and the labor market is still intact. Fragile because there is almost no buffer left: with a 2.6% saving rate, a wave of layoffs would hit spending faster than in a cycle where households had a cushion to draw down. The strength is genuine. The margin for error is gone.

The best argument against us

The strongest pushback is plain: a 2.6% saving rate plus sticky inflation can still break the consumer — a thin buffer is exactly what turns an income shock into a spending cut, and wages trailing CPI means the squeeze is real. That is a fair risk, and we hold it open. Why it hasn’t happened yet: the labor market is still intact — continued claims are down year-over-year and not in a sustained uptrend — and credit-card delinquencies, where stress shows up first, are still declining after seven straight quarters. Real spending keeps growing in spite of the thin buffer and the hot CPI print. The objection describes a real path to a downturn; the hard data simply isn’t on it yet. The day claims turn up and delinquencies stop falling, the pushback starts winning — which is exactly what the checklist further down is built to catch.

So is the US consumer healthy?

Our read: yes, with an asterisk. On the things that move the economy — spending, jobs, wage growth, loan performance — the US consumer is in good shape. The record-low sentiment is not enough on its own. We would not position for a consumer pullback because a survey hit an all-time low; that survey has been at recession levels for years while the tills kept ringing.

The asterisk is the saving rate, and we hold it honestly: the resilience is real but unusually dependent on the labor market staying intact, because there is no savings buffer doing the work. So we watch jobs, not vibes.

What this means for traders vs. long-term investors

The analysis is the same for everyone; what you do with it isn’t. The split that matters is your horizon — the trade and the allocation call point in the same direction here, but they watch different things.

Same conclusion, two clocks. The trader is fading a headline that keeps being wrong; the investor is refusing to let that headline reprice a multi-year allocation. Both are watching the labor market for the real turn — because that, not the mood, is what would actually break the consumer.

What would change our mind

This is the falsifiable part — precise, checkable triggers, not vibes:

• CautionIf credit-card delinquencies stop falling and rise for two straight quarters while unemployment is still low — stress before the layoffs, the genuine early-warning sequence, and the opposite of today’s data.
• BearishIf real consumer spending prints a negative year-over-year reading and continued claims start climbing — the recession signature the soft data has falsely flagged for years.
• NextReal consumption lands Jun 25, 2026; Michigan sentiment Jun 26, 2026. Both carry the live numbers above.

Until then, the honest summary is the uncomfortable one: the most miserable consumer on record is still spending like an expansion consumer.

The consumer scorecard

Every consumer series we publish, sorted by soft (how people feel) versus hard (what they do), using the latest CSV values. The split is the argument: the soft data is red, most hard data is green, and the thin saving rate stays amber.

How we checked it

None of these numbers are estimates — each is calculated straight from the official published series. Here’s how, in plain terms:

• ·Year-over-year compares each month with the same month a year earlier, using each series’ own official growth figures so a missing month can’t skew the comparison.
• ·A percentile is just where today’s reading ranks in the whole history — “2nd percentile” means only 2% of all past readings were lower.
• ·“Record low” means the latest reading is the lowest in the survey’s entire history — sentiment back to 1952, OECD confidence to 1993.
• ·The sentiment-vs-spending chart sets both lines to 100 at the start of 2021, so two things measured on different scales can be read on one picture.
• ·The lowest-sentiment table is built mechanically — the ten lowest readings in the survey’s history, each lined up with what spending did that month. We don’t pick which months to show.
• ·The spending figures use the data as it reads today, with later revisions included — not the first rough estimates as they were originally released.