Consumer sentiment hit 53.6 in October 2025, down 24% from last year. During the COVID lockdowns of April 2020, when 22 million Americans lost their jobs overnight, sentiment was 71.8. Americans feel worse about the economy now than during a global pandemic.
How Bad Is Consumer Sentiment Right Now?
The University of Michigan Consumer Sentiment Index just recorded its steepest annual decline outside of a recession. From 70.5 to 53.6 in twelve months. The current reading sits just 7% above the all-time low of 50, set in June 2022 at the peak of inflation fears. GDP grew. Unemployment stayed low. The statistics recovered. The feeling didn't.
Why Do Americans Feel Worse Now Than During COVID?
A single shock feels temporary. When COVID hit, people endured hardship because they believed it would end. Vaccines came. Businesses reopened. The crisis had a finish line. Inflation has no finish line. Three years of prices rising 20% feels permanent. Every grocery trip, every rent payment, every tank of gas reminds consumers their money buys less than it used to.
What Did We Expect That Didn't Happen?
We expected sentiment to recover with the economy. Inflation cooled from 9% to 3%. The Fed signaled rate cuts. Job growth continued. But purchasing power didn't return. Prices didn't fall, they just stopped rising as fast. Slower inflation isn't lower prices. Consumers wanted to feel whole again. Instead, they got "it won't get worse."
When Will Consumer Confidence Actually Recover?
Wage growth is now outpacing inflation for the first time in three years. Real purchasing power is expanding, not contracting. Sentiment is a lagging indicator. It measures memory, not reality. The economy improved in the data. It will improve in the feeling. But feelings follow paychecks with a delay measured in months, not days.
The pessimism isn't permanent. It's processing time. Americans survived a pandemic, an inflation shock, and an interest rate surge. Now they're recalibrating to a new normal. When the feeling catches up to the math, confidence will return. Not because things got easier, but because we adapted to harder. That's not fragility. That's resilience on a delay.