Consumer sentiment remains stagnant, with a widening gap between high- and low-income households. High prices and a weakening labor market continue to weigh on consumer confidence, particularly for lower-income individuals. While wealthier consumers show improved sentiment due to strong market performance, the overall picture reveals a fragile economic landscape.
by CORY SMITH | The National News DeskConsumer sentiment is "treading water," with a growing divide between the haves and the have-nots, according to Joanne Hsu, the director and chief economist of the University of Michigan Surveys of Consumers.
That’s more than a 20% drop from where the index stood at the start of last year and far below the long-term average reading of around 85."It's not really moving up. It's not really moving down. It's treading water," Hsu said.February saw an increase in sentiment for consumers with the largest stock portfolios, given the strong performance in the markets. But she said that was balanced out by an equally sized drop in sentiment for people who don't own any stock. There’s been a lot made recently of the so-called K-shaped economy, in which lower-income people are disproportionately hurt by inflation while high-income households fare better.Sentiment dropped early last year among all income levels as President Donald Trump unveiled his tariff plans. Since then, sentiment has rebounded for high-income people while it has continued to stagnate for lower-income folks. The pain of high prices and the weakening labor market continue to be the top drags on consumer sentiment, Hsu said.FILE - A customer shops at Kroger on January 22, 2026, in Little Rock, Arkansas. “It's been there for a while, that gap, and we have noted it, but it's getting wider,” Tinsley said. “And I think that's the concern really. The economy for a long time was being driven by essentially higher- and middle-income households, but increasingly it's being driven more and more by higher-income households, with the middle slowing. And that, in some respects, makes it a slightly more fragile picture, I would argue.” Hsu said 46% of the University of Michigan survey respondents spontaneously mentioned high prices as a drag on their personal finances. That’s a high share of unsolicited responses for any singular topic, and it’s particularly felt by lower- and middle-income people, she said. But Hsu said around a third of the wealthiest consumers were still mentioning prices this month. “It absolutely still registers for them,” she said. “It might not be as painful, but when you ask them about their personal finances, it still comes up.”Consumers point to tariffs as an upward pressure on prices, Hsu said. But she said policy uncertainty surrounding tariffs has also rattled consumers.The tariff-related responses on the University of Michigan survey going forward will largely depend on how much uncertainty was resolved by the Supreme Court decision, she said.Columbus woman to spend decades in prison after admitting to four fentanyl overdose deaths 2:35 UPDATERebecca Auborn was sentenced to four consecutive sentences each of 15 years to life prison on Thursday.This story is being updated.ORIGINAL REPORTINGBlendon Township announced that the officer acquitted of all charges in the shooting death of Ta'Kiya Young and will leave the police department.9-year-old boy dies after falling from 100-foot overlook during family visit
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Consumer sentiment stagnates with growing divide between haves and have-notsThe pain of high prices and the weakening labor market continue to be the top drags on consumer sentiment.
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Consumer Sentiment Stagnates Amidst Widening Economic DivideConsumer sentiment remains stagnant, with a growing disparity between high-income and low-income earners, according to the University of Michigan Surveys of Consumers. While high-income individuals experience improved sentiment, lower-income households continue to struggle, primarily due to high prices and a weakening labor market. This widening gap raises concerns about economic fragility.
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