Heather Long

This year has been an emotional rollercoaster for consumers.

Neil Mahoney at Stanford says people actually started off the year feeling relatively good about the economy.

But that optimism started to fade pretty quickly.

It hit a low in April, around when Trump announced sweeping global tariffs.

Looking back, Erin McLaughlin at the conference board says if she had to sum up 2025, it's sort of the year of the tariff and how that has impacted consumers.

And the year of uncertainty.

But Joanne Chu at the University of Michigan's Surveys of Consumers says for all the ups and downs, the sentiment rollercoaster has been heading in a clear direction.

The reason economists care about how consumers are feeling is that it generally drives how much they spend and consumer spending is one of the main drivers of the U.S.

economy.

Today, Xu says, people are feeling almost as bad about the economy as they were when inflation was at its peak in the summer of 2022.

And because most people had jobs and many were getting raises, they just kept on spending, even though they felt bad about the economy.

For a while, it seemed like the longtime link between sentiment and spending had broken.

But one of the big things that's different about this year is that consumers are quite worried about labor markets.

And Josh Bibbins at the Economic Policy Institute says there seems to be more of a connection again between how people are feeling and behaving this year.

sentiment was pretty bad, and you saw a noticeable deceleration in actual spending.

So I would say historically, they're pretty linked.

They became de-linked for a while.

2025, I think they started to come back together.

And he says that's probably largely because the labor market and wage growth are slowing.

I'm Samantha Fields for Marketplace.