Americans don’t – New federal and business data point to an economy that’s holding up under pressure, but fresh survey results show Americans increasingly feel their personal finances are worse than a year ago—an unusually wide gap that economists link to inflation pressures, e
For months, “resilience” has been the word many economists and investors have used to describe the U.S. economy’s ability to keep moving even as external pressures mount. Sharmin Mossavar-Rahmani. head of investment strategy at Goldman Sachs. said in May that people “continue to underestimate” the country’s ability to weather economic headwinds.
Mark Zandi, chief economist at Moody’s Analytics, echoed that view in a recent blog post, writing that the economy has been “impressively resilient” given what it has had to deal with, including higher tariffs and a heavy-handed immigration policy, as well as the Iran war.
But the part of the story that shows up in everyday life is getting sharper—not calmer. While many Americans are watching prices. especially at the pump. federal data show gasoline costs have surged since the war began on February 28. Gasoline prices are up some 40 percent, and that rise has weighed heavily on inflationary data.
On Wednesday, the Department of Labor said the surge in fuel costs helped push annual inflation to its highest level since April 2023. The department also pointed to increases in several other categories.
Still, the labor market has kept surprising people. The U.S. economy added 172,000 jobs in May, following gains of 179,000 in April and 214,000 in March.
That contrast—solid headline growth on one side, worsening feelings on the other—has become hard to ignore.
A strain showing up in surveys
The sharpest evidence comes from how Americans describe their lives. A report released Monday by the Federal Reserve Bank of New York found that the share of Americans who say their economic circumstances are “much worse” than a year ago jumped to 13.3 percent in May. up from 10.6 percent in April. It marked the highest reading since July 2022.
When the “somewhat” worse group is included, the picture widens even more. The Fed’s measure shows that 44 percent of Americans now rate their situation as at least “somewhat” worse than a year ago. That’s the highest level since January 2023.
Other surveys are moving in the same direction. The University of Michigan found consumer sentiment has fallen to a record low. The Conference Board’s monthly confidence gauge dipped last month, with concerns tied to inflation and pessimism about business and labor market conditions.
In other words: even as jobs come in, confidence is eroding.
Why the numbers and moods don’t match
Michael Weber, a professor of finance at ESMT Berlin, said the economy and Americans’ household finances appear to be “in better shape than sentiment surveys suggest.” He pointed to an important caveat: headline strength may be masking uneven realities beneath the surface.
Weber said consumer spending—estimated to prop up around two-thirds of U.S. GDP—has become “increasingly driven by households with substantial asset holdings.” He added that those households have benefited from rising markets even amid broader macroeconomic uncertainty and recent volatility.
That shift helps explain why economic indicators can look steady while many people feel they are not. An analysis conducted last year by Moody’s Analytics. quoted in The Wall Street Journal. found that the highest-earning households—those making $250. 000 a year—now account for around half of all consumer spending. Weber cited it as the highest share on record dating back to 1989.
Even outside of household perceptions, there are other signs of stress. Economist Douglas Holtz-Eakin told Newsweek that Americans are experiencing some “clear strains,” including rising credit card delinquencies and wage growth that is failing to keep pace with inflation.
And then there’s the way inflation lands in a household’s routine. Weber said consumer sentiment is “highly sensitive to inflation,” especially salient prices such as gasoline.
He framed it in simple terms: even when aggregate activity looks solid, households can remain pessimistic if everyday prices feel elevated. It’s a disconnect that can persist even when the broader data say the economy is still functioning.
That gap has followed administrations
The political and personal story is now overlapping in a way many presidents don’t want to see. President Donald Trump is currently shouldering blame for rising prices, with his overall economic approval sliding as a result. Holtz-Eakin said the magnitude of negative sentiment is “really striking. ” and he argued that frustrations have become so widespread that Trump no longer appears to be benefiting from the partisan splits that presidents often rely on in surveys.
He said Republicans still remain more optimistic than Democrats and independents across surveys, but GOP confidence has been steadily declining.
The New York Fed also pointed to an earlier moment for comparison: the last time this many Americans considered themselves “much worse off” was July 2022—around the period when inflation reached a 21st-century high of 9.1 percent and when Biden’s approval hit a nadir across a selection of polls.
Holtz-Eakin suggested the current administration could face the kind of reputational crisis that hurt predecessors—especially if inflation cannot be tamed and wages continue to stagnate. He said. “Biden never recovered. ” and added. “Trump is in the same territory now and should be focused on getting inflation under control.”.
The uneasy takeaway
Economists can point to jobs, spending that still supports the overall economy, and the idea of resilience under pressure. But Americans—at least in these surveys—are telling a different story about what it feels like to live through it.
In May’s data, the economy kept adding jobs and the consumer spending picture stayed buoyant. Yet the share of people who feel worse off than a year ago hit levels not seen since 2022, while confidence gauges fell to new lows.
For many households, it isn’t just what the economy is doing—it’s what the bills look like. And after a gasoline price spike tied to the Iran war, that daily reality has been getting louder.
U.S. economy jobs report inflation gasoline prices Federal Reserve Bank of New York consumer sentiment University of Michigan Conference Board Douglas Holtz-Eakin Michael Weber Sharmin Mossavar-Rahmani