Tyler Schipper, an economics professor at the University of St. Thomas, spoke with WCCO about the sharp decline in U.S. consumer sentiment, which recently reached its lowest level on record. Schipper discussed what the measure reveals about Americans’ outlook on their finances and the economy, as rising costs and economic uncertainty continue to shape consumer behavior and spending decisions.
From the article:
The latest consumer sentiment score is 44.8 — the lowest since the survey started in 1952. That means more people are saying they are struggling financially right now, or worry that they will be in the future, than they did during the COVID-19 pandemic, the Great Recession in 2008 and in the days following 9/11.
"It's certainly not a positive indicator for the economy," said Shipper. "Recognizing that the reason why people might be negative in that survey can be very different. Somebody might be responding to they had to fill up their gas tank this morning. Another person might have had their house foreclosed on." ...
Schipper says the quick solution to get consumer sentiment trending upward again is to lower gas prices, the cost of goods like groceries, as well as lower inflation. For the long term, he points to job security.
"If you think about your own personal economy, you might be looking to the future as well. And if you think AI is going to take your job in the future, that probably shows up in this data," he said.
Despite the rough outlook, there are many people whose personal finances continue to improve. Their influence on the economy, specifically how they spend, is partly why we haven't entered a recession, said Schipper.
