Why Consumer Sentiment Is So Low Despite Strong Economic Growth and Corporate Profits

Consumer sentiment just printed a preliminary 46.3, a reading below the 1st percentile of the University of Michigan survey’s history and lower than where it stood when any of the six recessions on record began. Yet the economy grew at a 2.2 percent annual rate in the second quarter, and final sales to private domestic purchasers, the cleanest gauge of underlying demand, rose at a 4.6 percent pace. The public sentiment suggests a movie flop, but the data show a sequel that beats expectations.

Headlines tell you what a gallon of gas costs this morning. Fundamentals tell you what companies earn and whether they’re keeping their people. By the second measure, the economy is stronger than the national mood. The administration’s strategy, in Treasury Secretary Scott Bessent’s framing, is to grow our way out of debt. This month, he told a Pennsylvania business audience, “Underneath, the economy is very strong.” But that’s not the message being received by the public, according to opinion polls.

JR

About the Author

Jay Rogers

Jay Rogers is a financial professional with more than 30 years of experience in private equity, private credit, hedge funds, and wealth management. He has a Bachelor of Science from Northeastern University and has completed postgraduate studies at UCLA, UPenn, and Harvard. He writes about issues in finance, constitutional law, national security, human nature, and public policy.

Featured Tags

Consumer sentiment just printed a preliminary 46.3, a reading below the 1st percentile of the University of Michigan survey’s history and lower than where it stood when any of the six recessions on record began. Yet the economy grew at a 2.2 percent annual rate in the second quarter, and final sales to private domestic purchasers, the cleanest gauge of underlying demand, rose at a 4.6 percent pace. The public sentiment suggests a movie flop, but the data show a sequel that beats expectations.

Headlines tell you what a gallon of gas costs this morning. Fundamentals tell you what companies earn and whether they’re keeping their people. By the second measure, the economy is stronger than the national mood. The administration’s strategy, in Treasury Secretary Scott Bessent’s framing, is to grow our way out of debt. This month, he told a Pennsylvania business audience, “Underneath, the economy is very strong.” But that’s not the message being received by the public, according to opinion polls.

JR

About the Author

Jay Rogers

Jay Rogers is a financial professional with more than 30 years of experience in private equity, private credit, hedge funds, and wealth management. He has a Bachelor of Science from Northeastern University and has completed postgraduate studies at UCLA, UPenn, and Harvard. He writes about issues in finance, constitutional law, national security, human nature, and public policy.