The University of Michigan SCREAMS “The American Consumer is Cooked” (Warning Sign?)

The University of Michigan’s new survey looks about as mid as their football teams… 

The University of Michigan survey just confirmed what everyone’s felt since July… the U.S. consumer is cooked. The five-year outlook for household finances hit its lowest level in over a decade, dropping to 96 on the index… a level not seen since 2011, a.k.a. A time before Connor Stalions became the greatest Michigan Wolverine of all time. 

(Source: Imgflip) 

In short, middle-income households drove the decline, with sentiment near record lows. People aren’t bracing for a “major financial calamity,” they’re just realizing the current one is permanent. Inflation isn’t falling fast enough to matter, wages aren’t stretching far enough to care, and 63% of consumers now expect unemployment to rise next year. Additionally, the survey’s director, Joanne Hsu, put it gently: “Consumers don’t feel like they’re thriving.” Translation: they’re exhausted, broke, and still paying a kidney to survive.

(Source: NBC News) 

Meaning, Trump’s second-term economy is a Rorschach test…everyone sees something different, but nobody’s smiling. The White House keeps talking about “robust real wage growth” and “historic trade wins,” but the sentiment data tells a different story: people feel poorer, less secure, and more unsure about where the next raise is coming from. Tariff-induced price hikes are still filtering through the system. Manufacturing’s cooling. The labor market is finally cracking. Middle America… that base that delivered Trump’s second term…  is starting to feel like it bought into a growth stock that topped out too early. Now of course, Trump did inherit a massive clusterf*k… so it’s not necessarily panic yet, but it is fatigue. Economic fatigue… the kind that builds slowly, rots confidence, and kills spending.

Translation: That gap…between data and lived experience…is becoming the defining feature of this cycle. The Fed can cut, the White House can message, and Wall Street can rally. But if the average American still feels poorer, the politics and the markets are living on borrowed time. And that’s the scary part. People don’t stop spending all at once. They just start buying less of everything… less travel, less dining out, fewer “experiences.” That’s the part of the curve where retail cracks, credit delinquencies spike, and political patience runs dry.

(Source: Giphy) 

Which means… which means… It's safe to say that the University of Michigan just handed us all a warning label that says: the American consumer is still alive, but the pulse is weak. So place your bets accordingly, friends. Until next time…

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.