Source: University of Michigan Surveys of Consumers via FRED
Data through: September 2026 · updated Sep 12 · Updates: Monthly
MThe three bars show the last 3 months (end-of-month values) for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
↓ 11.1% MoM↓ 16.9% YoY
Historical context: Currently in the 0th percentile of all historical readings.
What this means right now: Consumer expectations are at recession levels — Americans expect economic conditions to worsen significantly. This level of pessimism has historically preceded consumer spending contractions and economic slowdowns.
UMich Consumer Expectations · Monthly · 1960–2026
Grey areas = NBER recessions · Scroll to read · zoom and pan in Expand
Monthly values
UMich Consumer Expectations — the last 12 months
Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.
Month
Value
Band
Sep 2026
45.8
Severe/critical reading
Aug 2026
51.5
Concerning reading
Jul 2026
55.4
Concerning reading
Jun 2026
50.7
Concerning reading
May 2026
44.1
Severe/critical reading
Apr 2026
48.1
Severe/critical reading
Month-end readings of the same series the chart shows, from umich_expectations. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.
What is the UMich Expectations?
The UMich Consumer Expectations Index is the forward-looking half of the University of Michigan Consumer Sentiment survey. Rather than measuring how consumers feel today, it captures their expectations for their personal finances and the overall economy over the next 1-5 years. Because it is forward-looking, it functions as a leading economic indicator — deteriorating expectations tend to predict future spending slowdowns before they appear in GDP data.
The Expectations index is particularly sensitive to news events, economic narratives, and policy changes that affect how consumers envision the future. It often moves before Current Conditions because people update their future outlook faster than their assessment of present reality. A sustained decline in Expectations — even when Current Conditions remain solid — is an early warning that consumer spending is likely to slow in coming quarters.
How We Color-Code the UMich Expectations
Our heatmap colors each indicator based on historically significant thresholds:
Above 90
Optimistic expectations — consumers confident about economic future
75 – 90
Positive outlook — healthy forward expectations supporting spending
62 – 75
Cautious expectations — uncertainty about economic future
50 – 62
Pessimistic — consumers worried about economic future
Below 50
Very pessimistic — recession-level forward expectations
Historical Extremes — What Happened Next?
When this indicator reaches extreme levels, history shows consistent patterns:
May 2022Inflation Expectations Collapse
57.3
The lowest Expectations reading in the survey's history — consumers feared ongoing inflation would continue eroding their living standards. A powerful leading indicator that preceded the October 2022 market bottom.
Jan 2000Dot-Com Euphoria
103.6
Near-record optimism about the future near the dot-com market peak — consumers (incorrectly) expected the prosperity to continue indefinitely.
Feb 2009Financial Crisis Fear
54.1
Very low forward expectations during the financial crisis — reflected genuine fear about economic collapse. Reversed as stimulus and Fed action stabilized the financial system.
Investor Checklist — Current Reading
Based on the current UMich Expectations reading of 45.8 (Very Negative):
✓Maximum defensive positioning in consumer sectors
ℹHistoric lows in Expectations have been strong contrarian market signals — monitor for recovery
Frequently Asked Questions
What questions make up the Expectations sub-index?
The Expectations sub-index uses three of the five UMich survey questions: (1) expectations for personal finances in one year, (2) expectations for business conditions in one year, and (3) expectations for business conditions in five years. These three questions focus entirely on the anticipated future rather than current reality.
Does the Expectations index predict recessions?
It has a reasonable track record as a leading indicator. Sharp sustained declines in Expectations have preceded most US recessions by 1-4 quarters. The 2022 collapse to historic lows correctly signaled economic weakness ahead, even though a formal recession (by NBER definition) did not occur. The 2007-2008 decline accurately predicted the Great Recession.
Why do Expectations sometimes diverge from Current Conditions?
Divergences occur during transitional economic periods. When Current Conditions are strong but Expectations are falling (early 2022), consumers feel okay now but are worried about the future — typically due to rising inflation or rate hike fears. When Current Conditions are weak but Expectations are rising (early 2009), consumers feel bad now but see recovery ahead — reflecting stimulus and policy action.
How does policy news affect Consumer Expectations?
Significantly — Expectations are highly sensitive to news about Federal Reserve policy, fiscal stimulus, trade policy, and election outcomes. The Fed's rate decisions affect expectations through two channels: directly (consumers expect borrowing costs to change) and indirectly (market reactions to Fed policy affect the stock market, which influences the wealth effect on confidence).
Why do falling UMich Expectations matter more than falling Current Conditions for recession forecasting?
The Expectations sub-index is a leading indicator — it measures where consumers think the economy is heading, not where it is now. Sustained declines in Expectations typically precede actual cutbacks in spending and hiring by 2–4 months, giving investors an early warning that demand is about to soften. Historically, Expectations readings below 60 have often coincided with recessions or near-recession conditions.
Trending Questions
AI context · refreshed August 30, 2026
What investors are searching about this indicator right now, answered using current news and data.
1What happened to consumer expectations in August 2026?
Consumer Expectations fell to 50.6 in August from 55.4 in July. One-year business expectations fell 10% and the five-year outlook dropped 13%.
2Why did consumer sentiment decline in August?
U.S. consumer sentiment fell in August for the first time in three months on a worsening economic outlook. Consumers worry that inflation will remain elevated for the foreseeable future and are increasingly concerned that prospects elsewhere in the economy could be weakening.
3How are consumers viewing inflation expectations?
One-year inflation expectations eased to 4.0% from 4.2%, while long-run expectations held steady at 3.3% for a third consecutive month. Only 8% of consumers expect their income growth to exceed inflation in the year ahead, down from 18% in December 2024.
4Which consumer groups saw the largest sentiment declines?
Sentiment among Republicans slumped to the lowest since November 2024. Older, lower- and middle-income consumers and those without stock holdings saw sharper deterioration.
5What external factors are affecting consumer sentiment?
The drop in sentiment shows households continue to face pressure from elevated costs as the conflict in the Middle East drags on, with national average gasoline prices held above $4 a gallon across August. Ongoing policy uncertainty, including the Iran conflict, has also fueled expectations of further gasoline price increases.