Americans Say "THIS IS THE WORST ECONOMY SINCE 1978"

More Americans than ever are not feeling good about the economy right now, and that is reflected in the most recent data from the Consumer Sentiment Survey. If you take a look at this chart right here, going all the way back to 2015, consumer sentiment was hovering anywhere between 90 and 100. Pretty good. People were feeling pretty good about things, including myself back then, actually. I probably would never have made a video like this back in those days. And then you can see right around the pandemic, it plummeted. But even then, even during the worldwide pandemic, it plummeted down to only 70. And then it kind of crept up a little bit again. But fast forward a couple of years later into like 2023 or so, it hit its record low of about 50. And fast forward to today, that's about where it is right now. And consumer sentiment has been going down for five straight months in a row. So essentially, since the beginning of 2025, the current reading is at 50.8. So it's basically 50. And the expectation was that the index was actually going to tick up to 55 from April's reading of 52.2. But instead, it slid another point and a half. And this is the index's second lowest reading since 1978. That is just unbelievable. I mean, I'm actually shocked that people are feeling worse now than they did during the pandemic. I think that is the biggest shocker because things were so uncertain, even more uncertain than now, and nobody knew what was going to happen. But right now, there's not quite as much uncertainty. Because if you think about it, it's already certain that your paycheck is not going as far as it used to. It's already certain that inflation has eaten up a big chunk of your budget. So we already know that. That's not a surprise anymore. About three quarters of Americans mentioned tariffs as one of the main reasons why they're not feeling good or optimistic about the economy right now. And that's understandable considering how uncertain things are. Although, like I've mentioned in previous videos, you haven't seen anything yet. If these tariffs actually stick, and they don't go away, or they don't get reduced, people aren't going to really start feeling the effects of the tariffs until a few months from now. That's when it's really going to start hurting people's wallets. And check this out, the inflation expectations are through the freaking roof, man. Inflation expectations for the year ahead jumped to 7.3% in May, up from 6.5% in April. That is unbelievable. Five-year inflation expectations went to 4.6%, up from the previous 4.4% reading. So people are massively worried about how much everything's going to cost in the coming years. And the interesting thing is, well I guess it's not that interesting considering how bogus the CPI is, but it's worth noting here that the actual CPI reading in April was at 2.3%, so very close to the Fed's target, right? But everybody I think is kind of realizing that that number is fake at this point. There's no legitimacy to that 2.3% inflation mark, and that's why inflation expectations are over 7% right now. People aren't stupid. People see what they're spending at the grocery store, and spending for gas, and spending for anything right now. Right now we have a mixed bag of results when it comes to retailers, and also home builders, and different big players in the economy talking about how much the tariffs may or may not increase the price of things. And since there's so much uncertainty surrounding that, we really don't know how much the price of anything is going to go up at this time. You know it's funny because every month we talk about this consumer sentiment survey from the University of Michigan, and I've never been a part of this, and I've actually never known anybody who's been a part of this. So if you do, or if you've ever been a part of it, let us know in the comments because I'm curious to know if anybody watching this channel has actually taken this survey before. So most likely the Fed is also going to continue just keeping interest rates the same, even though they should be raising them in this environment right now to discourage borrowing, especially if inflation is supposedly going to go up because of the tariffs. Well then why would you want to encourage people to borrow money? Just like this stupid situation where they're trying to, you know, encourage people to go and buy brand new cars and be able to write off the interest on their tax returns. Like what is the reason for that? People should be saving money, not borrowing it. Now I realize that actual dollars haven't really been worth saving ever since the dollar has been taken off the gold standard due to how much value has been inflated away on it, but you get the idea. The principle still remains the same. People should still be looking to be able to actually pay for things without borrowing, if possible. There shouldn't be incentives and encouragement to go out and borrow money you don't have. And the Federal Reserve Bank of New York, they actually do their own consumer sentiment survey and their consumer expectations painted a much rosier picture, which is kind of funny because it says that their survey suggested that median inflation expectations for the year ahead were at 3.6 percent. So that's pretty far below the six and a half percent reading from the University of Michigan survey. But the fact remains the same that both surveys are reflecting the fact that most consumers are feeling less optimistic about their finances and the economy right now. The biggest concern that people have is their purchasing power being inflated away as well as weakening labor market. I made an entire video about this the other day that a lot of people seem to enjoy about how the labor market is in free fall and collapse right now. All of the markers regarding the labor market are turning negative right now, and it doesn't look like it's going to get better anytime soon. And this is the number one concern that most people have about the economy right now. People are worried that if I lose my job, will I be able to get another one to replace my current income? And unfortunately, for a lot of people, the answer right now is no. So, of course, what does that do? It has a blowback when it comes to consumer spending. You know, consumer spending is about 70 percent of the GDP in this country, and it's no wonder we're probably going to see yet another negative quarter of GDP because people are pulling back right now. And it makes sense, right? If you expect things to get worse, then you're probably going to pull back on your spending. It's common sense and it's kind of just basic human nature. And a lot of people are seeing their economic situation kind of just deteriorate before their eyes right now. As inflation continues to be more of a problem than we were promised, and wages are not keeping up with it, how are people supposed to feel? You know, I get these comments all the time like, oh Michael, you talk about all this bad stuff. I feel so depressed now. What are the solutions? I've already named the solutions a million times on this channel that are never going to happen. Maybe we should go back to having the dollar on the gold standard. How about that? Oh, we can't do that because then gold would have to be 30 grand an ounce. So what? So what? That's probably what it needs to be. Oh, we can't cut all these government programs because everybody relies on Social Security and Medicaid and Medicare. People kill me in the comments for that. Well, it's like, we didn't have any of those programs over 100 years ago and somehow we made it as a nation. Now all of a sudden, we need it. Now all of a sudden, we need to have crippling amounts of debt and crippling amounts of social safety nets in order to keep this country afloat, which is actually the iceberg that's taking us down. So it's like, yeah, there are real world answers to these problems. There's things that we could do to fix these problems. None of them would be an overnight fix. There would be lots of pain and lots of problems that come up along the way in order to get us back on track. The problem is nobody wants to do that. No politician wants to do it. No one receiving help from the government or a Social Security check wants to do that. Everybody just wants to keep on trucking along as is and complain about it. So I'm not sitting here complaining about it. I'm just reporting to you the current state of affairs. And if you have solutions to these real world problems, feel free to put them in the comments below and let us all know. But you know, it's funny because in stories like this, they talk about how even though the consumer sentiment has been on the decline over the past five years or so, you know, they're saying there's a disconnect between that and how people are spending in the economy because the first quarter consumer spending gained 1.8% from last year, according to the preliminary GDP reading. And retail sales were a little bit softer than expected in April, posting a 0.1% increase compared to the 0.2% economists were expecting. Yeah, but spending does not reflect what people feel about the economy, guys, because people need to spend money. It is impossible to live your life in modern society without spending money. We were just talking about a little bit ago what the inflation expectations are versus what the official CP lie reading is at 2.3%. People are aware that it's much higher than what we're being told. And it's a big surprise that spending is 1.8% higher than it was a year ago. That's actually kind of low considering how high inflation has been. If you think about it, you would expect to see that spending number even higher just due to inflation, just due to how much things have gone up. But I think what you're seeing is you're seeing a combination of people needing to spend more because everything just costs more. So that's reflected in these consumer spending GDP numbers. And that makes it look like, oh, wow, look, the economy is still booming. No, it isn't. People have to spend more on gas, groceries, car insurance, and their rent and house payments and everything because it just costs more. It's not because they want to spend it. It's because they have to. And it also shows the resiliency of Americans. If people are expecting 6.5% inflation or 7.5% month over month right now, and the spending is only up 1.8% year over year, that's pretty good. People are spending a little bit more because they have to, but they're conserving as much as they can. That's how I interpret this data. And since tariffs are on the top of everybody's mind, there was another story that came out today talking about how the tariffs are probably going to push up the prices for homeowners insurance and car insurance. Right now, the previous forecast was that auto insurance premiums would go up 5% this year on average nationwide. And now, because of the tariffs, it's supposed to go up an additional 4%, which would be a total of 9% of an increase for car insurance in 2025, according to Insurify. Homeowners insurance is expected to rise about $100 a year on average as building materials and furnishings from abroad go up in price. And of course, there are a ton of variables to this depending on which state you live in, the type of car you drive, the specifics of your house, all kinds of things. Just like everybody kind of has their own personal inflation reading on their life, how much any one person is impacted by the tariffs changes dramatically depending on your life situation. Now, we don't know for sure yet if it's actually going to increase because of the tariffs, because right now, this is just an estimate. So it's maybe, maybe not. I have no idea. I'm just reporting to you what I'm hearing out there and what I'm reading. You guys can let me know what you think. But the reality is, if it does go up, if insurance does go up due to the tariffs or they can blame the tariffs and say that's the reason it's going up, because insurance companies love to do stuff like that, that's not a good sign for people either. We've just talked about how everybody's worried about how much inflation is going up. Everybody's worried about being able to keep their job or be able to replace their income if they need to. Having the price of anything go up right now, especially insurance, something that's mandatory, if you're a homeowner with a mortgage or you drive a car, that's not going to be great for people. I'm not going to go into all the specifics on what kind of tariffs around what type of supplies or building materials or car parts or anything like that. I just wanted to mention that this is something that is being projected that is going to go up in price in the near future. They're estimating that about 23 out of the 100 most popular car models sold in the United States could see insurance rates jump by an extra nine percentage points on top of each model's pre-tariff estimate. And depending on which state you live in, you might see your car insurance go up anywhere between 2% and 14%. And I wish I had this number next to me right now because I actually just got the renewal notice for my car insurance and I think it actually went down, which I was amazed to see because I've even made videos in the past complaining about how much it has gone up. And I think it actually dropped a little bit. Well, it did go down, but not by as much as I was hoping or remember that it did. I got a whopping Last time I paid $887 for the six months in December last year. Now it's $871. But hey, it's a discount. Which is even more ironic because it says here that Florida and New York are going to be the states that get hit with the highest increases because these two states are no-fault states, which raises the probability of insurance fraud. But if they're saying another side effect here besides insurance rates going up could be people putting off much needed car repairs because car parts might be harder to get and or more expensive. And of course, if you are seeing a noticeable increase in any type of insurance, you definitely want to shop around. And one of the easiest ways of bringing your premium down is to opt in for a higher deductible. That's actually something I did on my insurance about a year ago in order to lower it because it went up as much as it did. Another signal that things aren't doing too great right now. AMC, the movie company, they just said that their box office performance hit its worst since 1996, guys. And right away when I read this, I don't feel too bad because the movies that they're putting out today are pretty awful for the most part. It is rare that I see a movie that was made in 2024, 2025. That's like, wow, that was really good. There have been a couple. I'm not saying there aren't any, but they're rare. I think the only movie that was made in 2025 so far that I can say I really liked, it was called The Gorge. It was really good. If you haven't seen it, I would check it out. Anyways, AMC reported a first quarter adjusted loss of 58 cents a share on 862.5 million dollars of revenue. In the same period last year, AMC posted a loss of 78 cents a share of loss on 951 million in revenue. So things aren't looking too good for moviegoers right now and AMC. AMC is saying if this level of activity were to continue, then it would be highly problematic for movie theaters. You know, that's the other thing, right? The movie theaters, like I haven't been to a movie theater in, I don't even know how long, guys. I think the last time I was in one was 2019. And the problem with movie theaters is not only how expensive they are, but they're kind of disgusting. You know, like they don't really clean them up that well. Between movies, you know, maybe they might sweep the floor a little bit and get rid of all the trash. But what about the seats, you know? What about the nasty that was just sitting in there and now the seat smells like you know what because somebody else was sitting there. Like do they, how often do they really clean that up, you know? So it doesn't make going to the movies a highly appealing prospect when nobody cares. You know, when nobody takes care of the place and makes it feel like a welcoming and, you know, nice place to go. So maybe if they would start making better movies again that people actually want to see, that aren't full with woke initiatives littered throughout them, as well as having movie theaters that aren't charging egregious prices and are actually clean and comfortable to go visit, maybe people would start going again. After all, it is a pretty cheap form of entertainment compared to going on a vacation or going out to dinner. But maybe things are on the uptick again because they're saying April 2025 industry-wide domestic box office was double that of April 2024 and May is looking to be the same. So who knows, maybe they'll make a recovery now that people are looking for cheaper alternatives to have entertainment that doesn't cost a fortune. And going back to the insurance increases, I don't know if it's worse to be living in California or Florida these days when it comes to insurance, guys, because State Farm, they just requested an additional 30 percent rate hike in California. Like, how many times do they have to raise insurance just to stay profitable there? Just one week after getting an approval to raise homeowner insurance rates by 17 percent, State Farm General revealed plans to ask regulators for an additional 11 percent increase. They're like, yeah, we got our way for the 17 percent, now we want more and we want an additional 11 percent. Already the 17 percent increase is set to go into effect in June this year, but State Farm is also just trying to get the rate hike they originally requested because back in June of 2024, they actually requested a 30 percent rate hike. But if it's granted, it won't go into effect until 2026. So people will have some short-term relief and you're not gonna have to worry about paying that additional 11 percent until a year from now. So yeah, get ready to save up your inflation adjusted dollars that are losing value by the second right now and get ready to pay that an extra 11 percent. I don't know, show me a savings account or any type of investment that's safe where you can get an 11 percent return on investment in one year, guys, show it to me right now. Not talking about risky stuff like Bitcoin or YOLOing into the riskiest investments into the market. We're talking about something a lot safer. Show me something you can get an 11 percent return right now. The problem is there isn't anything you can get an 11 percent return on right now, at least nothing that I know of, but yet your insurance is expected to go up by that much in a year from now if you have State Farm and you live in California. So think about that. Also, they're going to be hitting renters and condo owners even higher because those people are supposed to see their rates go up by an additional 15 percent, not 11 percent, which would mean a 36 percent increase for condo owners and a 52 percent increase for renters insurance. That is wild. I know the worst part is basically everybody in California requires you to have renters insurance. Now that I've had to rent a couple apartments over there for the summer, I have to get renters insurance. It's cheap. I only pay five dollars a month and I have the basic bare bones coverage because I have hardly anything in there of any value, so I don't really care. And if you're a landlord that rents out your home, meaning you have an investment property in California, you're looking at a 38 percent rate hike. So that's the state of insurance, guys, especially if you live in California. You're either getting dropped altogether right now and getting no coverage and being forced to find probably even more expensive coverage or if you want to keep the coverage you have, get ready to pay more, probably 30 percent more within the next year. And let me know if your wages are going to go up 30 percent in the next year also to help keep up with that rising cost of living. Just let me know. And don't think this is the end of it either because you can pretty much guarantee that in a year from now that they're going to be asking for an even larger rate hike because that's what insurance companies do. They're constantly raising the rates, guys, but I'm not seeing any other type of insurance I have go down right now. Anyways, let us know what you're feeling about the economy. Are you with all these people who are saying the economy is absolute garbage right now because that's what most Americans are thinking according to the latest numbers? And I don't think it's going to be getting much better anytime soon until we see some massive, massive improvements in the job market and the expectations of future inflation, the expectations of being able to afford a home, and the expectations of people making considerably more money. Until those things improve, how is anyone supposed to feel better about the way things are? So if you enjoyed this video, make sure you subscribe to the channel. And if you don't want to wait for my next video to come out, check out this one on the screen right over here and I'll see you in the next one.