The pain of high prices and the weakening labor market continue to be the top drags on consumer sentiment.
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.Former Austin Police Chief Joseph Chacon, who stepped down from the Austin Police Department after a 25-year career, is one of four finalists to become the nextThe founder of an Austin-based water brand was sentenced to over four years in prison for defrauding investors of over $6 million.Todd O'Gara, the 46-year-old fLong before President Donald Trump stepped to the podium inside Coosa Steel Corporation on Thursday, a line had already wrapped around the building.Austin police are searching for a man who they say evaded arrest after officers made contact with him earlier this month.On Tuesday, Feb. 10, at around 10:15 p.Early voting in the primary election has opened with significantly higher turnout than in the last midterm cycle, according to early data from Travis County and
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