US Consumer Sentiment Falls To Historic Low: Economic Anxiety Deepens Amid Affordability Crisis, Labor Market Strain

U.S. consumer sentiment has plummeted to its lowest level on record as the affordability crisis continues to weigh on wallets, while the cooling job market deepens economic anxieties.

Sentiments Crash To 2008 Levels

On Sunday, The Kobeissi Letter, in a post on X, spotlighted the University of Michigan's latest Economic Conditions Index, revealing a record-low reading of 50.4, falling 5 and 8 points below the troughs seen in 2022 and during the 2008 financial crisis, respectively.

For context, the post points out that the index was “11 points higher in 1980, when annual inflation was at 13.5%,” one of the most inflationary periods in U.S. history, compared to the latest figures at just 2.7% in November 2025.

See Also: Inflation Eases To 2.7% And Wall Street Finds Some Breathing Room (UPDATED)

The downturn in sentiment also reflects a sharp erosion in buying power, with Americans now viewing big-ticket purchases as more unaffordable than at any point on record.

“An ongoing affordability crisis and a weakening labor market continue to weigh on household finances, dragging consumer sentiment lower,” the post said, even as the economy is expected to post modest growth in 2026, at 2% by professional forecasters, up from 1.3% in June.

“Consumers have rarely been this pessimistic about the economy,” the post concluded, a warning that deep economic anxieties continue to persist despite headline improvements in inflation and GDP growth.

BREAKING: The US consumer sentiment assessment of current economic conditions has declined to 50.4 points, the lowest level on record.

This is 5 points and 8 points below the lows seen in 2022 and 2008.

By comparison, the index stood 11 points higher in 1980, when annual… pic.twitter.com/48dJ4HoAjJ

— The Kobeissi Letter (@KobeissiLetter) December 21, 2025

America’s K-Shaped Economy

The data increasingly reflects what economists describe as a K-shaped recovery, where affluent households continue to spend freely, while lower-income consumers are pulling back amid mounting financial pressure.

Economist Mark Zandi of Moody’s Analytics noted that millions of Americans are “already living on the financial edge,” while the wealthier households continue to pull ahead. Zandi also said that 22 states, plus Washington, D.C., which account for a third of the GDP, were already in a recession, while the national economy was still avoiding it.

JPMorgan Asset Management echoed similar concerns, noting that the AI-driven rally on Wall Street has lifted portfolios among the affluent classes, leading to increased spending on luxury goods, while middle‑income households and rate‑sensitive sectors remain “soggy.”

Read More:

• Inflation Data Faces Credibility Questions: ‘This Is Totally Inexcusable’

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