Consumer Sentiment Is Crashing Everywhere | Joanne Hsu, UMich

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Jun 5, 2025

Joanne Hsu, Director of Surveys of Consumers at the University of Michigan, shares her insights on the striking disconnection between consumer sentiment and resilient economic data. She discusses how anxieties about trade policies and job security shape perceptions of personal finances. John Llodra, lead partner at New Harbor Financial, highlights the impact of consumer sentiment on financial strategies and investment decisions. The conversation dives into inflation concerns, navigating market emotions, and the importance of informed financial planning in uncertain times.

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INSIGHT

Pervasive Consumer Worry in 2025

Consumer sentiment has been declining for months due to worries across business conditions, personal finances, income growth, unemployment, and stock market performance.
These pervasive worries signal broad anxiety about the economy's near-term future.

INSIGHT

Sentiment Leads, Hard Data Lags

Hard economic data is backward looking, while consumer sentiment is forward looking, explaining current discrepancies.
Recent strong consumer spending was driven by front-loading purchases to avoid future price increases, not by economic strength.

INSIGHT

Affluent Consumers Show Sharp Sentiment Drop

High-income consumers showed the sharpest drop in sentiment, crucial because they contribute most to aggregate spending.
Their declining confidence and spending could significantly impact the overall economy.

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For a while now, the "soft" data (like confidence surveys) have indicated worry that times are tough..But the "hard" data (like the unemployment rate, corporate profits, retail spending, etc) have shown that the economy is proving quite resilient.So why the discrepancy? And which data set should we be giving more weight to?For perspective, we're fortunate to welcome back to the program Joanne Hsu, Director of the Surveys of Consumers at the University of Michigan.If you've ever heard of the Univ of Michigan's highly influential Indices of Consumer Sentiment, Consumer Expectations, or Current Economic Conditions -- Joanne's in charge of those.WORRIED ABOUT THE MARKET? SCHEDULE YOUR FREE PORTFOLIO REVIEW with Thoughtful Money's endorsed financial advisors at https://www.thoughtfulmoney.com#sentiment #confidence #umich _____________________________________________ Thoughtful Money LLC is a Registered Investment Advisor Promoter.We produce educational content geared for the individual investor. It’s important to note that this content is NOT investment advice, individual or otherwise, nor should be construed as such.We recommend that most investors, especially if inexperienced, should consider benefiting from the direction and guidance of a qualified financial advisor registered with the U.S. Securities and Exchange Commission (SEC) or state securities regulators who can develop & implement a personalized financial plan based on a customer’s unique goals, needs & risk tolerance.IMPORTANT NOTE: There are risks associated with investing in securities.Investing in stocks, bonds, exchange traded funds, mutual funds, money market funds, and other types of securities involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods.A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.Thoughtful Money and the Thoughtful Money logo are trademarks of Thoughtful Money LLC.Copyright © 2025 Thoughtful Money LLC. All rights reserved.