{"id":580042,"date":"2026-04-12T16:33:13","date_gmt":"2026-04-12T16:33:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/580042\/"},"modified":"2026-04-12T16:33:13","modified_gmt":"2026-04-12T16:33:13","slug":"the-mystery-variable-that-explains-stubbornly-low-consumer-sentiment","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/580042\/","title":{"rendered":"The mystery variable that explains stubbornly low consumer sentiment"},"content":{"rendered":"

This is my weekly Sunday roundup of new political data published over the last seven days. It is free to read, but if you want to support independent data-driven political journalism, become a paying subscriber<\/a> and get additional data products and premium analysis at least once weekly.<\/p>\n

Leading off: Consumer sentiment just hit the lowest level ever recorded by the University of Michigan \u2014 lower than during the financial crisis, peak COVID, stagflation, and Biden\u2019s presidency. I write about what that means for 2026, and about an under-covered variable in explanations of low consumer sentiment.<\/p>\n

On deck this week: As I mentioned Friday, I\u2019ll have a Tuesday Deep Dive on the relationship behind economic news sentiment, prices, and consumer sentiment and what this means for voter psychology and the midterms. Friday\u2019s Chart of the Week is TBD..<\/p>\n

Thank you for reading Strength In Numbers for another week! On with the data.<\/p>\n

The University of Michigan has been measuring consumer sentiment since 1952. On Thursday, economist Justin Wolfers flagged<\/a> that the April reading came in at 47.6 \u2014 the lowest in the survey\u2019s 74-year history. That index value is lower than for the depths of the 2008 financial crisis, the worst of the post-COVID inflation surge, the 2022-23 inflation spike, and any point during the stagflation of the early 1980s.<\/p>\n

Charles Franklin at Polls & Votes put together a useful comparison<\/a> of consumer sentiment in Trump\u2019s first term vs his second. In the first 23 months of term one, the Michigan index averaged 97.5. In term two so far, it\u2019s averaged 55.5 \u2014 and now sits at 47.6. That\u2019s a 50-point swing from the first-term average to today\u2019s reading.<\/p>\n

Two things stood out to me about this new data release. First, here\u2019s the thing about the first term that\u2019s easy to forget: the economy was basically the only thing Trump had going for him politically. His approval ratings were otherwise underwater on pretty much every policy domain. His signature legislative achievement \u2014 the 2017 tax bill \u2014 was unpopular, as were his immigration policies. And his general vibe as head of state was divisive (less so than now but still a serious drawback).<\/p>\n

Yet consumer confidence was sky-high from 2017 through early 2020, the stock market was booming, and unemployment was low. Republicans still lost 40 House seats in 2018.<\/p>\n

So what\u2019s going to happen when Trump\u2019s policies are underwater across almost every issue, AND economic sentiment is literally worse than it\u2019s ever been, according to this rating? We\u2019ll have to wait to see exactly what, but signs are pointing to a solid rout. <\/p>\n

In short, it matters not just that Trump is more unpopular than he was at this point in 2018, but how he\u2019s more unpopular.<\/p>\n

There\u2019s a theory popular in certain corners of the very online left that consumer sentiment is inexplicably low right now because of the way the news media is covering the economy. The theory points out that in most of 2024 and 2025 the labor market was doing fine by historical standards, but people still rated the economy poorly. The sentiment numbers, per this view, are a product of news and social media amplifying bad economic stories and data and dragging down the national mood.<\/p>\n

I\u2019ve got some data I\u2019m going to dig into next week that speaks to this more directly. But for now, look at the following chart from the Michigan survey itself<\/a>. It tracks the share of consumers who cite high prices as the reason they are personally struggling financially.<\/p>\n

\"IMG_4660.jpeg\"<\/a><\/p>\n

Before 2021, this number hovered near zero percent. Empirically speaking prices were a non-factor in how people viewed the state of the economy.<\/p>\n

Then, everything changed. The share of adults citing high prices asa sources of anxiety went exponential during the 2021-22 inflation spike and never came back down. It\u2019s now above 50%, likely because of the gas prices spike from the war in Iran. <\/p>\n

This trend actually looks similar to a chart of cumulative change in food prices since 2014: <\/p>\n

\"\"<\/a><\/p>\n

And the price of shelter:<\/p>\n

\"\"<\/a><\/p>\n

While inflation dropping from 8% to 3% reflects a \u201ccooling off\u201d of the economy, but evidently people still mostly just see high prices for things and get upset about that. And fair enough!<\/p>\n

My theory is that price levels account for much to most of the \u201cpuzzle\u201d of why consumer sentiment is lower than you would predict based on the historical relationship between CPI, unemployment, the cost of money and etc. I will test the models and see if that\u2019s true in reality too. The theory here is simple: prices didn\u2019t used to dominate how people thought about their personal finances. But now they do, and that\u2019s a source and level of anxiety that doesn\u2019t show up in historical data on inflation, unemployment etc<\/p>\n

Maybe that is unsatisfying as a grand political theory. But I think it\u2019s workable descriptively and helps resolve some of the puzzle of voter psychology here. In terms of causality, there is still some work to be done.<\/p>\n

Share<\/a><\/p>\n

This week\u2019s first-ever monthly deep dive podcast episode on Monday featured focus group insights on what voters really want from their representatives right now:<\/p>\n

The Deep Dive column on Tuesday covered new research that shows why ideological moderation is an incomplete and potentially suboptimal strategy for parties to win back defectors in non-competitive states:<\/p>\n

\"OnlyOnly 8% of “moderates” actually want moderation<\/a><\/p>\n

Democrats posted some of their biggest election swings of the 2026 cycle so far in Wisconsin and Georgia on Tuesday night \u2014 more evidence of the shifting blue midterm environment:<\/p>\n

Trump is underwater in every competitive House and Senate seat, according to my latest state and district level MRP estimates:<\/p>\n

\"NewNew polling: Trump is underwater in 135 GOP House and Senate seats<\/a><\/p>\n

The normal weekly podcast explained how that MRP modeling works, and covers other newsy topics like the Iran ceasefire and Tuesday\u2019s elections.<\/p>\n

And Friday\u2019s Chart of the Week looked at the relationship between gas prices and presidential approval \u2014 timely, given the Iran-driven spike:<\/p>\n

\"GraphsGraphs about gas prices and presidential approval<\/a><\/p>\n

If you\u2019re a frequent reader of Strength In Numbers, I\u2019m confident you will get a lot of value out of a paid subscription. You\u2019ll get access to all of my Tuesday Deep Dives, monthly polling data, and more.<\/p>\n

Nothing really aside from the consumer sentiment data above. <\/p>\n

I did think this piece on AI \u201cpolls\u201d from Eli <\/a>at Nate Silver\u2019s blog was good, and it links to lots of interesting research (including mine!) on the capabilities of what industry folks are calling \u201csynthetic sampling\u201d or \u201cdigital twins.\u201d <\/p>\n

My point on this, starting back in 2024, has been that you shouldn\u2019t think of these tools as polls, but as predictions. They use large language models and other systems to predict how \u201cpeople\u201d with certain demographic traits would respond to survey questions had they been asked them. This is similar in principle to how something like MRP works, except for the key factor that the information the model has about the beliefs held by certain types of people comes from the LLM, not underlying survey data. <\/p>\n

That\u2019s not polling, but maybe it could be a decent predictive model if you don\u2019t have any other information about how people in a certain geography are feelingz<\/p>\n

And that\u2019s it for this week. I spent most of the weekend hiking instead of reading the internet so section 3 is shorter than usual. Back to normal programming tomorrow. Here\u2019s a picture of a gopher I saw waddling around in the woods:<\/p>\n

\"\"<\/a><\/p>\n

Strength In Numbers will be back in your inbox Tuesday with a deeper look at the consumer price data.<\/p>\n

Got more for next week? Email your links or add to the comments below.<\/p>\n","protected":false},"excerpt":{"rendered":"This is my weekly Sunday roundup of new political data published over the last seven days. It is…\n","protected":false},"author":2,"featured_media":580043,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-580042","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/580042","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=580042"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/580042\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/580043"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=580042"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=580042"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=580042"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}