Even if your finances are in good shape, the past few years haven’t exactly felt easy. Grocery bills are higher. Insurance costs more. Filling up the gas tank can still feel frustrating. And even when you’re not personally stretched, it’s hard not to notice friends and family feeling squeezed. So it’s no surprise that the latest University of Michigan survey found that consumer sentiment has fallen to one of the lowest levels ever recorded.1 In fact, Americans are feeling more pessimistic about the economy today than they did during many major periods of turmoil, including the inflation crisis of the 1970s, the dot-com bust, the 2008 financial crisis, and even the COVID-19 shutdowns.2 But markets are telling a different story. In the 12 months leading up to June 2026, the Dow Jones Industrial Average climbed more than 20%.3 And in February 2026, the index topped a record 50,000 points for the first time.4 That’s “pop open a champagne” type performance. And if you only looked at stock prices, you might assume the economy was firing on all cylinders. It’s a bit like looking at a confusing car dashboard. The speedometer says one thing. The fuel gauge says another. A warning light is blinking in the corner. No single gauge tells you everything. So, what gives? Let’s start with the gauge closest to home. The economy can look healthy on paper while people experience it very differently in real life. Wealthier households have benefited from rising home values, higher wages, and stronger investment portfolios. Others are still navigating soaring prices and higher monthly payments.5 And many middle class households without large investment portfolios haven’t benefited from surging stock prices. That’s why two people can look at the same economy and reach very different conclusions. In plain English: the headline numbers may look OK, but not everyone feels OK. Then there’s the profit gauge. Markets don’t move based on household budgets alone. They pay a lot of attention (much more in fact) to corporate profits. And many U.S. companies are making a lot of money. According to the Federal Reserve Bank of St. Louis, corporate profits grew from about $2.0 trillion before the pandemic to roughly $3.9 trillion in 2026.6 That helps explain why stocks can rise while consumers feel uneasy. A household may look at groceries, gas, insurance, and mortgage rates and think, “This still feels expensive.” Investors looking at profits and productivity think, “There may still be opportunity here.” Both views can be true. They’re just answering different questions. And then there’s the future gauge. New technologies like artificial intelligence have created excitement about productivity, growth, and what companies may be able to do next. They’ve also created uncertainty for workers who wonder how their careers and workplaces may change. Again, both things can be true. But the same trend that excites businesses can make households feel less certain about the road ahead. So, what does this mean for investors? The lesson isn’t that consumers are wrong or markets are right. It’s that one headline rarely tells the whole story. Consumer confidence matters. Market performance matters. Corporate profits matter. But no single gauge is a complete investing strategy. That’s why moments like this are a good reminder to look at the full dashboard, not just one blinking light. Your long-term decisions should connect back to your goals, timeline, risk tolerance, and the strategy built around your life. When the headlines feel confusing, your strategy matters even more. Have questions about what this economy could mean for you? Let’s talk it through. |
P.S. Does the economy feel better or worse to you than the headlines suggest? I’d be curious to hear what you’re noticing. |
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Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only. |