U.S. consumer sentiment lingers at historically low levels even as the stock market shows resilience following substantial gains from 2023 to 2025. The economy continues to advance despite various concerns, highlighting a disconnect between financial markets and public mood.
Resilient Spending Driven by Top Earners
Consumer spending holds steady, largely powered by the top 10% of earners who drive half of all expenditures. This group benefits from wealth effects tied to rising stock values and real estate prices, bolstering their consumption patterns.
Vulnerabilities in High-Income Support
However, this support proves fragile. Declines in equity or property values could swiftly undermine high-income household spending, exposing risks to overall economic momentum.
Broader Consumer Stress Mounts
The majority of consumers face growing pressures from a sluggish job market and fallout from the escalating regional conflict in the Middle East. These factors contribute to widespread unease, pushing sentiment toward a potential breaking point.
