American consumers have formally given up, according to the University of Michigan’s Consumer Sentiment Index, which fell to 47.6 in April — the lowest reading in the survey’s 74-year history and, experts say, a figure that suggests a significant portion of the population has decided to simply sit quietly with their money rather than spend it on things.
The index, which measures consumer optimism about the economy, had already fallen from 64.7 in February to 53.3 in March before completing its historic collapse in April. Economists are calling the trajectory “steep,” “alarming,” and “the exact shape of a cliff drawing.”
“What we’re seeing is a consumer base that has essentially logged off,” said one economist, who requested anonymity because she is also a consumer and relates to the sentiment on a personal level. “They are aware that things exist. They just don’t want to buy them right now.”
The data arrives alongside reports that job openings fell five percent between January and February, the number of people actually being hired fell 9.3 percent over the same period, and the International Monetary Fund has revised its global growth forecast down to 3.1 percent — a number that sounds fine but is delivered with the energy of someone slowly closing a laptop.
Retail analysts note that the collapse in consumer confidence has been particularly acute in discretionary spending categories, meaning Americans are still buying food and medicine but have collectively decided that throw pillows can wait.
“I had a whole list,” said one shopper interviewed outside a largely empty home goods store in Cincinnati. “I just looked at the list and thought: do I need any of this? And I didn’t. I went home and sat in a chair I already own.”
Economists say the index could recover if geopolitical tensions ease, inflation moderates, or if someone figures out a compelling reason to feel good about things in general. No timeline has been given for any of these developments.
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