Joanne Hsu

Right now we're seeing consumers telling us that the current conditions, what's happening right now, is very, very painful for them.

But actually when we look at expectations for the future, that has been pretty stable.

Right now we're seeing consumers telling us that the current conditions, what's happening right now, is very, very painful for them.

We really shouldn't be surprised at all by these negative reads.

Consumers have been under a tremendous amount of strain, and particularly with these climbing gas prices, there's only so much consumers can do to pull back their gas consumption, and that just leaves less money for everything else.

Consumers are still reserving judgment about the long-term impact of the conflict in Iran.

But right now, with the gas price situation, it's just taking out such a huge chunk of their monthly budgets that for many consumers, it is...

It is producing quite a bit of strain.

Consumers are very loud and clear that the top factor that's been on their minds for several years has been the cost of living and the burden of high prices.

And with the surge in gas prices just in the last couple of weeks, consumers continue to be very, very frustrated.

We have consumers across the board who are just telling us how much they are weighed down by the burden of high prices.

There is a glimmer of hope here.

Most of the deterioration in sentiment was concentrated in the short run with year-ahead business conditions, year-ahead personal finances, year-ahead inflation expectations, and the outlook for the long run is not nearly as sour.

Consumers are loud and clear that they are extremely frustrated by the persistence of high prices and their challenges with their cost of living.

They were already feeling stretched in 2025.

And with this 25 percent increase in gas prices, they're feeling stretched even more.

The direction of inflation and the direction of interest rates are as much about what we think will happen as about what's actually happening.

Joanne Hsu directs the monthly surveys of consumers at the University of Michigan.

If enough people rush to buy things, they'll boost demand and push up prices.

Conversely, workers may also demand higher wages if they think life is going to cost more in the future.