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How Consumer Sentiment Hit a Record Low Despite a Strong Labor Market
The University of Michigan consumer sentiment index just hit an all-time low in May 2026, even as the S&P 500 sits near 7,500 and average hourly earnings ticked up to $37.40. Lucas and Luna explore why Americans feel so gloomy: the Iran war feeding inflation fears, the gap between headline CPI and what people actually pay for groceries and rent, and how the Fed's 10-year breakeven inflation rate of 2.40% tells a different story than the sentiment surveys. They also examine whether the wage gains in the Employment Cost Index are keeping pace with real-world costs, and why the disconnect…
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