Скачать или смотреть Americans brace for an economic slowdown ahead of jobs report

University of Michigan’s latest consumer sentiment report reveals Americans are feeling less confident.

Transcript:
CAROLINE WOODS: Joining me now is Joanne Hsu, director of the surveys of consumers at the University of Michigan. Joanne, Thanks so much for being here.

JOANNE HSU: It's a pleasure to be here.

CAROLINE WOODS: So Joanne, sentiment ticked down to 58.2 in August, which was slightly below expectations. Tell us what is the takeaway about the consumer with the reading of 58.2?

JOANNE HSU: The main thing that's on consumers' minds right now is high prices and the threat of inflation going forward. And that picked up in August, primarily because of tariff policy developments kind of escalated this month. Consumers are not necessarily expecting the worst case scenario that they have been bracing for in April and May, in the wake of the reciprocal tariff announcements. But still, they're expecting the continued uncertainty around tariff policy and the high tariffs that are currently in place to lead to a resurgence of inflation going forward. And they're also expecting unemployment rates to rise in the year ahead.

CAROLINE WOODS: So how would you actually classify the consumer right now? Still confident but cautious?

JOANNE HSU: I would say they are broadly quite wary about the future. They are. We saw a deterioration in expectations on a number of fronts this month. We saw deterioration in expectations for business conditions, unemployment, inflation, income expectations firmed up just a little bit, but they're still pretty subdued compared to six months ago or a year ago. So consumers aren't really feeling that confident at all. They're not feeling as bad as they were in April, but they're really bracing for a slowdown.

CAROLINE WOODS: How closely does sentiment align with actual consumer spending behavior, though. Because we also saw today's personal income and spending report was reflective of a consumer that's holding up quite well. So why is there this disconnect?

JOANNE HSU: So historically speaking, we've been collecting data on sentiment since 1946. Typically when people don't feel confident, they tend to pull back their spending. And when they feel confident, they're more likely to spend. And I actually think today this morning spending report bears that out because that reflects spending in July. And in July, we had a pretty big jump in sentiment compared to April and May. And it's they gained some confidence over the summer when tariff policy announcements slowed down a bit. But August is a different story. Things started to pick up.

Furthermore, it is true that after the pandemic, people felt really had really poor levels of sentiment, but they were willing to spend through it. That's because labor markets were really strong at that time. And they had very, very reliable incomes. People who wanted a job could get a job. And so even though they didn't feel good about the high inflation they were seeing, they didn't feel good about the economy. They had the income to support continued spending.

And when we look at about 2/3 of consumers, they expect unemployment to rise in the year ahead. Their income expectations are not strong right now. So that support that we have for post-pandemic spending just isn't there right now.

CAROLINE WOODS: Yeah and we've heard this for quite some time. Consumers say the economy feels worse than the data actually shows. So is that just vibes or do you think there are cracks that the data just haven't caught yet?

JOANNE HSU: The data that people are talking about is typically backward looking data. By definition, it's telling us where we are our last month, last year. Whereas when we asked consumers about sentiment, we're asking them to project into the future. So the economic data that we're often talking about and the economic views and expectations of consumers, they're not even covering the same time period. We're asking people where they think things are going because that's what's going to affect their decisions.

And what's pretty clear is that consumers are quite worried that the economy is going to slow down in the future, regardless of where the economy was last month or last year.


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