Consumer Sentiment Is Crashing Everywhere | Joanne Hsu, UMich

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**Joanne Hsu** (0:59)
We're seeing worries across multiple dimensions of the economy. Relative to six months ago, we have consumers not only worried about business conditions, they're also worried about their personal finances. They're worried that unemployment is going to go up. In fact, they're worried that their own income growth is going to slow down. And they're worried about stock market performance. They're worried about so many different things about the economy, and the signs are all moving in the same direction.

**Adam Taggart** (1:32)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. For a while now, the soft data, like confidence surveys, have indicated worry that times are getting tough. But the hard data, like the unemployment rate, corporate profits, retail spending, et cetera, have shown that the economy is proving quite resilient. So, why the discrepancy? And which data set should we be giving more weight to? For perspective, we're fortunate to welcome back to the program Joanne Hsu, Director of the Surveys of Consumers at the University of Michigan. If you've ever heard of the University of Michigan's highly influential indices of consumer sentiment, consumer expectations, or current economic conditions, well, Joanne's in charge of those. Joanne, thanks so much for joining us today.

**Joanne Hsu** (2:19)
My pleasure to be here.

**Adam Taggart** (2:20)
All right. Well, thank you so much for coming back on the program, Joanne. We had a chance to chat last year. A lot has happened since then. And you have probably better than most anybody in this country, have your finger on the pulse of the American consumer more closely than, like I said, probably anybody. So very curious to hear what you're learning from the surveys today.
We talked off camera about how we just connected that we both went to the same undergraduate program. So it's fun to have you back on now knowing that you are a fellow alum there. But look, let's just get to the meat of it right away if we can, Joanne. What are the University of Michigan surveys currently telling us about consumer sentiment?

**Joanne Hsu** (3:07)
Over the course of 2025, consumer sentiment went on a four-month consecutive slide, four consecutive months of very strong declines in sentiment. That's been very much attributable to concerns over volatile trade policy.
Interestingly, in the middle of May, after the reversal of some of the very high or the pause on the very high tariffs on goods from China, consumer sentiment has ended that slide. By the end of May, the bleeding appears to have stopped, but overall, we have very low consumer sentiment. Consumers are broadly anticipating a slowdown in the year ahead.

**Adam Taggart** (3:49)
Slowdown, let's dig into that word. Are they expecting the economy just to become a little bit more sluggish, or are these really fears of a recession?

**Joanne Hsu** (3:57)
We're seeing worries across multiple dimensions of the economy. Relative to six months ago, we have consumers not only worried about business conditions, they're also worried about their personal finances. They're worried that unemployment is going to go up. In fact, they're worried that their own income growth is going to slow down, and they're worried about stock market performance. They're worried about so many different things about the economy, and the signs are all moving in the same direction.

**Adam Taggart** (4:24)
Okay. I mentioned in the intro the difference between the soft data and the hard data. If you hear US. Treasury Secretary Scott Besson being interviewed on the media, it's like every week, they basically hammer them over the head with both consumer and in general CEO sentiment data.
And his response to date has been, you know, I've been around the block a fair amount. You know, the soft data doesn't always materialize into the hard data. And right now, the hard data is looking pretty good. And I'm not going to worry too much about the soft data until and unless I see it reflected in the hard data. Why do you think we're not seeing the hard data be more effective at this point if sentiment is kind of as dire as you seem to be saying it is?