By JBizNews Desk | May 5, 2026
Something unusual is happening in the data that tracks how Americans feel about the economy — and it matters for every business owner, retailer, and worker trying to understand where consumer spending is headed next.
Two of the most closely watched surveys in the country are now telling sharply different stories.
The Conference Board’s Consumer Confidence Index rose to 92.8 in April, up from 92.2 in March and marking a third consecutive monthly increase. At the same time, the University of Michigan’s Consumer Sentiment Index fell to 49.8, the lowest level in the survey’s more than 50-year history — below even the lows reached during the 2022 inflation shock, when it bottomed at 50.
Both surveys measure how Americans feel about the economy. But they are not measuring the same thing — and the gap between them is becoming one of the most important signals in the current economic cycle.
Jobs vs. Cost of Living
The divergence comes down to what each survey emphasizes.
The Conference Board index leans heavily on the labor market. It asks consumers whether jobs are available, whether employment feels secure, and whether hiring conditions are improving. On those fronts, April showed modest strength.
About 27.3% of respondents said jobs were “plentiful,” largely unchanged from March, while the share saying jobs were “hard to get” fell to 19.8% from 21.3%. As long as employment remains stable, this measure tends to hold up.
The Michigan survey looks at something different: personal finances and inflation.
It tracks how consumers feel about the cost of living, their ability to afford daily expenses, and where they think prices are heading. And on those measures, sentiment is deteriorating rapidly.
Year-ahead inflation expectations jumped from 3.8% in March to 4.7% in April, the largest monthly increase in a year. Longer-term expectations rose to 3.5%, the highest level since late 2025.
Just as important, sentiment declined across every demographic group — regardless of income, age, education, or political affiliation.
Researchers behind the Michigan survey pointed directly to the impact of rising fuel prices and the broader cost pressures tied to the Iran conflict, which are now feeding into everyday expenses.
What the Gap Is Really Saying
Economists see a clear message in the split:
Americans still feel employed — but they no longer feel financially comfortable.
Paychecks are coming in, but those paychecks are buying less.
Gasoline prices have climbed back above $4 per gallon nationally, grocery costs remain sharply elevated compared to pre-pandemic levels, and mortgage rates have moved back above 6.5%, raising the cost of housing and borrowing.
“That gap between income and expenses is what drives sentiment lower,” said Diane Swonk, Chief Economist at KPMG, noting that employment alone is no longer enough to support confidence. “People can be working and still feel worse off.”
A Warning Sign for Spending
Historically, this kind of divergence has mattered.
When Conference Board confidence remains relatively strong while Michigan sentiment weakens, it often signals that consumers are beginning to pull back — not across the board, but in specific areas.
Spending on big-ticket items typically slows first. Purchases of cars, appliances, and homes become more sensitive to higher borrowing costs and tighter budgets. From there, the impact spreads.
Businesses begin to see softer demand. Investment slows. Hiring follows.
“The Michigan survey tends to lead,” Swonk said. “It captures the pressure consumers are feeling before it shows up in behavior.”
Recent data suggests that shift may already be underway.
The Conference Board’s own survey showed expected spending over the next six months declined across most service categories in April. Consumers indicated they were pulling back on travel, hospitality, and discretionary retail — even as spending on essentials remained steady.
What It Means for Businesses and Policy
For businesses, the takeaway is immediate.
Consumers are still showing up to work — but they are becoming more selective in how they spend. That shift tends to hit discretionary sectors first, from travel and entertainment to non-essential retail.
For policymakers, the picture is more complicated.
The Federal Reserve is watching both surveys closely, balancing a labor market that remains relatively strong against a consumer base that is increasingly strained by rising costs.
Inflation expectations, in particular, remain a concern. When consumers expect prices to rise, it can influence behavior — from spending patterns to wage demands — making inflation more difficult to control.
The Bottom Line
The data is not contradictory — it is layered.
One survey shows an economy where jobs are still holding up. The other shows households that are feeling the squeeze more intensely with each passing month.
Together, they point to an economy that is still functioning — but under growing pressure.
And for businesses and investors, the direction of that pressure may matter more than either number on its own.
JBizNews Desk
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