Pocketbook issues continue to dominate consumer views of the economy.
That’s a 50-year chart from the University of Michigan Sentiment Final Results for December 2025
Consumer sentiment confirmed its early month reading, inching up less than two index points from November, within the margin of error. While lower-income consumers posted gains, sentiment for higher-income consumers was little changed. Buying conditions for durable goods fell for the fifth straight month, whereas expectations for personal finances and business conditions rose in December. Labor market expectations lifted a bit this month, though a solid majority of 63% of consumers still expects unemployment to continue rising during the next year. Despite some signs of improvement to close out the year, sentiment remains nearly 30% below December 2024, as pocketbook issues continue to dominate consumer views of the economy.
Year-ahead inflation expectations decreased for the fourth consecutive month to 4.2%. This is the lowest reading in 11 months but is still above the 3.3% seen in January. Long-run inflation expectations eased from 3.4% last month to 3.2% in December, matching the January 2025 reading. In comparison, readings ranged between 2.8 and 3.2% last year, and were below 2.8% throughout 2019 and 2020.
Data download is sporadic in the 50-year tables. The lead chart is from the University of Michigan, with my anecdotes.
Here are some charts since 2015.
University of Michigan Consumer Sentiment Overall Index
University of Michigan Consumer Sentiment Current Conditions
Current conditions at 50.4 is a record low.
University of Michigan Consumer Inflation Expectations
Inflation Expectations
- One-Year Look Ahead: 4.2 Percent
- One-Year Look Ahead 3-Month Moving Average: 4.4 Percent
- Five-Year Look Ahead: 3.2 Percent
- Five-Year Look Ahead 3-Month Moving Average: 3.5Percent
Hello Jerome Powell, is 4 percent “well anchored”?
Close to target?
It’s a good thing for the Fed that inflation expectations don’t matter.
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It’s another grim month according to ADP.
December 4, 2025: Challenger Reports Employers Announced 71,321 Job Cuts in November
Announcements imply future, not immediate, layoffs and unemployment claims.
December 8, 2025: Health Care Inflation Bomb Makes the Fed’s 2 Percent Target Almost Impossible
Let’s discuss 2026 health care premiums and what they mean to the Fed’s preferred measure of inflation.
Please note Only 56 Percent of Republicans Say the Economy Is Good
If you don’t understand why, please click on some of the preceding links.
Inflation expectations are a joke. Insurance costs (health, auto and homeowners) are more than 5% of a persons/families costs. Homeowners also face high property taxes and maintenance costs that exceed 5%.
FROSTY WROTE.
“I’m probably going to miss that physical boat as I’m a gold stock guy, not a stacker. ”
my rebuttal old sport. i wish all my gold had not been lost in that dreadful boat accident i had. btw, i think your analysis and comments are great. and i appreciate your willingness to offer your investment advice. i mean that. this site used to have much more actionable comments years ago. i’ve seen one evil empire crumble in my lifetime. when the gold mines in ussr were seized by the oligarchs, the gold in hand made one sleep a little better. i was lucky to have had opportunity to be in the board rooms of the HQ of some gold mining companies in Russia in the 90s as a visitor and friend of some russian investment bankers to the oligarchs. what a fun and exciting time. i liked the fact that they always put a huge spread of food and drinks served by gorgeous women before any business was discussed. reminded me of the stories my dad told me of business in nyc board rooms in the 1930s and 40s………now the men in amerika are so uptight and seem so wimpy and weird to me.
So the questions are:
Does sentiment always predict economic activity and stock market gains or losses?
Ans. Highly corollary, but not always.
Does the DOW/gold ratio correlate to sudden downturns?
Ans. Highly corollary, but not always.
For stock/option/futures traders wanting to use leverage to capitalize on a massive slowdown or collapse I repeat the following.
“The market can remain irrational far longer than you can remain solvent”.
Place your bets once the downfall has started is the translation.
Although a VIX at 14 is pretty inviting…
😉
1981, 1992, 2001, 2008, 2021. This chart has identified some great shorting opportunities.
my favorite chart of all time. dow/gold ratio is also a great indicator of sentiment and fundamentals, imho. i’ve always preferred a 25 to 50% gold allocation in my small fortune. of course my small fortune is everything to me, so it’s a great fortune. gold easily transfers tax and estate free to any heirs one has. https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-historical-chart
Great indicator!
hands down the greatest chart for long term sentiment and long term trading………i’m suspecting we head to the lows of great depression as this evil empire spirals and crumbles like the ussr did. spend 10 minutes with any human primate whose nation has spiraled into the abyss and they understand what gold coins in the hand means.
remember when FDR made gold ownership illegal for amerikans. i suspect that is coming in the near future here.
I’m probably going to miss that physical boat as I’m a gold stock guy, not a stacker.
The way I figure it if you need physical gold and silver to settle accounts, beans and bullets are better assets. Antibiotics and first aid supplies are even more important. Bottles of booze are great for trading as well.
Pretty crappy to have a government that makes us so insecure we have to think about survival mode.
Elections have consequences and electing Trump was a massive mistake!
Not just that, he confiscated their gold and defaulted on WWI debt payable in gold. FDR was very much a fascist in his treatment of the economy and his manipulating the US into WWII very dishonestly. And then prosecuting the war in a manner driving deaths to needlessly above 85 million. A war that made the world safe for Communism.
No wonder the market continues to melt-up and FOMO appears to be gaining more followers by the day.
Everyone I know under 40 wants a straight up socialist revolution because this shit isn’t working. It feels like we’re a 2nd world country. We have a kleptocracy, corrupt Fed, record inequality, uncontrolled inflation, and the tech industry is a black hole sucking up all the drinking water, electricity, and electronics, and all of these things are continuing processes getting worse and worse over time. This isn’t sustainable. If they force it to be sustained through even further inflation backed up by authoritarianism. There’s going to be major unrest.
Let them eat tax cuts!
“There’s going to be major unrest.”
They’ll no longer be called protestors, they’ll be called ‘domestic terrorists’.
Good thing we have a newly expanded domestic security force complete with newly built out concentration camps (ICE facilities).
The Fourth Turning, aka Konratieff Winter, is the time of unrest, as the long term debt cycle resets. Hence all the talk of a Great Reset by the WEF
crumbling evil empire 101. i eyewitnessed the collapse of USSR in the 90s. it was wild. currency goes to zero. oligarchs own everything. i had an oligarch as a brokerage client. learned and saw a great deal. i smell the similar thing of course in a different fashion. but this is a crumbling evil empire just like our cold war enemy was. only difference is amerikans vote for this shit. democracy works.
I don’t understand the pessimism. I have two relatives, brothers, both in their mid to late ’30’s. Parents were lower middle class. Mother was the proverbial lunch lady, which caused the young men no small amount of ridicule by classmates. Dad was a Homer Simpson-type mailman. They grew up in a rent-controlled development, for low income families. They lived at home while attending state college, but still took out student loans for tuition. The younger fellow is an engineer, and just purchased his second home. He and his wife are always going on exotic vacations, The older fellow has a master’s degree and works in academia. He also bought a home a while ago. They are both doing quite well. They worked hard, did the right things, and are reaping their justly deserved rewards. This is not an isloated story, but doesn’t have the negative reinforcement that so many whiners seek. Work hard, study hard, be smart in planning your career, and you can get ahead in this country, no question.
Someone on my team just killed themselves over our layoff.
They’re getting picked off by “reduction in force” where I work. Top talent, too.
Money alone sets all the world in motion. Publilius Syrus c 42 BC
what is a team? sorry for the loss.
“The future is already here – it’s just not very evenly distributed.” William Gibson
55 year old software engineer here. I can’t get an interview let alone a job.
No second home or exotic vacations for me even when I did have a job.
Sometimes things work out, sometimes they don’t. Your brothers are one divorce and/or layoff away from the soup lines. We all are.
Now in your defence I’m in Canada and we’re rapidly spiralling down to third world status. So things aren’t as bleak south of the border as they are up here. However there seems to be a general slide the world over in living standards.
It’s pretty tragic too as it’s totally self-inflicted. We should be living the best of times. Instead we’re fighting over nonsense while the jackboots are being zipped up.
> it’s totally self-inflicted..
Really? Destructive forces clearly guiding corrupted, blackmailed or otherwise terrified or insane politicians into running their countries into disaster where common sense has become a scarce commodity. Supported by at least half the population brainwashed into believing absolutely crazy concepts such as humans responsible for “climate change”, excepting chem trails or windmill ecodisaster where this is indeed the case. Takeover of Europe by Islamic mass immigrants definitely not “self-inflicted”, same goes for mass poisoning of half of the Wests population by eugenicist psychopaths running the show through ownership of quasi-totality of financial resources / pharmaceutical-military complex. Destruction of small ag and SMEs clearly not self-inflicted either. Enemy more and more out he open while plan is coming unstuck and desperate to avoid millions showing up with pitch forks. High time to wake up guys..
Did University Of Michigan survey any of the same people from 1975?
In 2024 when Dems brushed aside economic anxiety, it didn’t work. When Trump tries, it’s even more ridiculous because he’s such a known bullshitter. People know things aren’t going well. The cost of everything is going up and DC’s only solution is to spend more and make it worse. 340 million people can’t just move to Asia, so their sentiment is dour.
“340 million people can’t just move to Asia, so their sentiment is dour.”
True but those that can will live happily ever after.
There has been a widespread bias for savings to become impounded in idle balances or leakages from the main income stream (complete deregulation of Reg. Q ceilings) or dissipated in financial investment (the stock market’s erroneous “wealth effect” / mal-investment), i.e., the transfer of title to existing goods, properties, or claims thereto).
“If you like your inflationary depression, you can keep your inflationary depression.”
a look at the labor market
promises vs reality
https://newsletter.mikekonczal.com/p/a-year-in-the-maga-labor-market-story
healthcare the only source of job growth 2025 (now the legs cut off)
jobs in mfg drop even faster
unemployment in “native-born” workers is up
women gained far more jobs than men this year
I wish I could tell you that the reason people in their twenties can’t find jobs and the reason many of us are likely to be poorer over the next few years was more sophisticated than “we’re going to turn all the girlbosses into tradwives once they see all the manly men at the USA iPhone-screwing factory.” But I don’t think it is.
The bleak irony is that even after sacrificing real prosperity to chase this 4chan-level political economy, they still won’t achieve their goal. The jobs aren’t coming back, the wages aren’t rising, and family formation won’t be rescued by trying to rewind the labor market to a world that never existed in the first place.
Yeah, well, that’s all we got. Just need to double down on the propaganda.
Funny how the latest downturn started in 2017 after Trump was elected.
Based on the University of Michigan Current Sentiment Index, the country should be deep into a recession, but BLS officials are waiting for more data before declaring a recession.
Overall confidence is well demonstrated by the price of gold blasting above its all time highs along with silver. With Trump destroying our trade relationships and global confidence in liberty and justice for all, there is little reason to hold dollars.
Expect another downgrade of the US credit rating as our Pedogrifter-in-chief and his oligarchs clean up and concentrate more and more assets into their hands.
Meanwhile, gold mining stocks are continuing their explosive rally and profit margins are exploding. The value of underground inventories is based on gold prices of $1,250 to $1,700 for most of the major miners and this represents a major undervaluation given the permanent debasement of the dollar.
Expect significant upward revisions to the dividend payments of the top ten gold producers or significant share re-purchase announcements.
Inflationary Depression seems to be locked in for the duration.
Welcome to the Trump/GOP crashing economy. Happens every time with republican clowns. At some point, we need thinking adults back in control of government.
Just wait till health care insurance premiums explode and people can’t afford to eat out, shop, travel, or do anything else but pay for health insurance. A circus can be fun and entertaining with elephants, clowns, and freaks but sooner or later you gotta go home and pay the bills.
Next up is a steep stock market correction or crash….coming right up in 2026.
You left out the Gold Crash in 2026? It has started it climb towards such, as all the “True” Gold Investors are Speaking Up “Now is the time to buy, don’t be left out in the Cold” type Rhetoric! Heck all the Countries in the World are buying Gold now , don’t you know, or haven’t you heard? The “True”Investors of course can’t wait to sell, and grab All The cash coming their way.
One thing I do very much admire & Respect about History, and that’s the simple Fact, that it does continually “Repeat Itself” as it did in 2013, and is about to do so once again in 2026…
Silver is a much better play. It’s a monetary tool and heavy industrial commodity. AI relies heavily on silver even beyond the AI bubble.
I agree with Silver and like Silver as an equivalent investment as well! Depends how things are going and where. Silver wins in Manufacturing requirements, but gold wins in the massive Jewelry markets. They are both speculative investment plays, and can move quickly if heavy investors liquidate, or needs dissipate.
Gold is a real asset – there is a finite amount of it. That’s where its value lies. At some point, that will be important.
In the coming crash, I think the gold price will do nothing, just hold steady.
– Gold is a real asset – there is a finite amount of it. > It’s an investment, no different than any other investment. Its value is in the eyes of the buyer / holder and that’s it. Not tied to anything but itself, and there is a shi&#$d of it out there, and everywhere.
– That’s where its value lies. At some point, that will be important. > When Gold crashes, the true investors HOLD until the bottom and many speculate once again. Others sell if Cash is needed obviously. Som hold forever…
– In the coming crash, I think the gold price will do nothing, just hold steady. > That won’t happen. Way too much CASH will be needed. Some bought gold, speculating on such an occurrence, so they could sell it for needed profit.
Who know however, so you could be Correct!
It could possibly be used as “currency”, in the absence of cash.
You would turn the Gold into whatever value it holds in current equivalent Cash.
gold is money. always has been. sometimes it’s art and jewelry and religious objects like candle holders. i have a nice old roman catholic gold one about 4 feet tall. pairs well with a crucifix and incense.
When I’m hungry, I hope I have a lot of yellow rocks!
Until Mr T says “I want to buy your gold!” on TV it isn’t yet time to dump gold.
Much of the profit taking from Gold, will be earmarked for specific Stocks within the Market. The powerful are in the know, and will know what stocks will be very wise investments to make. Not AI imo, but certainly in energy (all), and New Long Term Opportunities, that will come to fruition, from the Billions in U.S. (NEW $)Investments…
You could be right. Asset rotation takes place all of the time. I was reading some stuff recently by Michael Burry. He is of the opinion to start liquidating stock holdings going forward. His thesis? You might miss some of the continuing upside moves in the market, but you will be protected from a much greater move to the downside. Suggests cash, short-term treasuries, dividend-paying energy stocks, and some precious metals, but need to do immediate research on quality, well-managed companies to jump in to buy at discounted price levels.
Not familiar with Burry much, but great points! Parking cash, if possible, in lower but guaranteed investments is smart too. Gold is great if you financially Hold It at times, as they will arise, and if cash is required, many will need to or prefer to sell it, unfortunately at a loss… That’s what the True Investors count on. Money often times Controls where the money goes, and as such much of the profits will be “Re-Invested” by the same, At The Bottom…
Michael Burry is the guy that shorted the mortgage market prior to the collapse. He was profiled in the movie, The Big Short. His company, Scion Capital, incurred losses until his theory of a mortgage crisis finally kicked in. Has a bit of autism….thinks outside of the box. He could be wrong, but he’s not stupid. Time will tell. That’s the difficult thing with predictions…’TIMING’.
– Just wait till health care insurance premiums explode and people can’t afford to eat out, shop, travel, or do anything else but pay for health insurance.
> Hmm… That’s exactly what happened to Me! When I had 2 kids we couldn’t afford to eat out Ever, Travel haha joking, Not, and shopping was hand me downs mostly. Insurance an expense too of course… but we paid that First Always!
What kind of weirdo votes down an honest comment like that?
living in amerika with wife and kids, with my own small businesses, and paying for health insurance that don’t cover pre existing conditions as basic as asthma and some blood diseases was very nerve wracking in the 80s, 90s and early 2000s. amerika is a shit show of nihilist war mongering assholes. who don’t do the humane and decent things most rich world countries provide. democracy works. assholes elect assholes.
We need thinking adults back in control of the voting levers. Elect clowns, expect a circus.
Dear MP045v2 and Frosty
IT’s folk’s like you that make reading the comment section; so much better than the
main article.
The Fact that your DJTS hate fest over rides common sense flabbergasts me.
Oh how great everything was under the Democrat’s rule, no hanky panky, no corruption, Trumps perversions ? but disregard the Dems evil, my goodness
folks like you all ( and there are many of you) give no real hope for the salvation
of this republic………… Guess it’s inevitable, but hard to swallow.
I have repeatedly covered the fact that the economy and stock market do far worse under republicans than democrats. All most people care about is their pocketbook, that’s it. The whole abortion, trans, dei, “illegals”, and other nonsense whistles cater to the extremists clowns of both parties and is a zero-sum game. All I care about is profiting enough to leave this circus for good.
Don’t take my word for it, listen to Donald Trump.
https://www.youtube.com/watch?v=rRndMiVIB-w
Welcome to the Trump/GOP crashing economy. Happens every time with republican clowns. At some point, we need thinking adults back in control of government.
Roosevelt had a recession in a depression. Obama’s economic recovery from the Great Recession was the worst since the Great Depression.
You clearly didn’t watch….click on the link below.
https://www.youtube.com/watch?v=rRndMiVIB-w
Many consider this man as a savoir, listen to what he says.
Got an exit strategy?
Doesn’t sound much fun.