The University of Michigan’s survey on consumer sentiment reached its lowest reading in history this month. Incredibly, the sentiment is lower today than it was during COVID, the global financial crisis, and even lower than 9/11, the stock market crash of 1987, and any recession since 1978. What’s so surprising is that the economy is not in recession and the unemployment rate is well below average at 4.3%. So what gives? In this Economics Weekly, Richard de Chazal looks at the U.S. consumer, with the view that they are still resilient, even as they face some headwinds. Simply put, this is not a consumer-driven recovery—it’s a capex one.
