Feeling the Squeeze: How Consumer Confidence can Shape Markets and the Economy
Economist Dr. David Anderson (Texas A&M) breaks down why U.S. consumer confidence has slipped to levels lower than the late 1970s/early 1980s and what that means for everyday households and the broader economy.
Jeffrey Snyder, Broadcast Retirement Network
Joining me now, Dr. David Anderson of Texas A&M University. Dr. Anderson, great to see you. Thanks for joining us this morning. Hey, it's great to be with you this morning. Thanks.
And before we get into consumer confidence and prices, how did the semester go?
David Anderson, PhD., Texas A&M University
My semester went great because I was not teaching class this spring, so.
Jeffrey Snyder, Broadcast Retirement Network
Okay, a little bit of research and analysis?
David Anderson, PhD., Texas A&M University
Yeah, focus on a lot of that stuff. Just, you know, a lot of real applied research on markets, a lot of things on, certainly beef prices, that's been in the news a lot. Just really things like that, catching up on some other stuff.
So, you know, when the fall semester hits, we'll be back in the classroom and sort of back to normal.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, well, you got to give your brain a rest, and I know you want to spend time with your grandchildren. So I wanted to expand our conversation. Normally when we talk, we talk about beef prices and egg prices, but I want to pull back a little bit.
I saw some recent news that US consumer confidence may have slipped a little bit, and I immediately thought of Dr. David Anderson, not because of the confidence slip, but because I wanted to get some clarification. So you saw the readout. You look at all the economic indicators.
The markets, though, Dr. Anderson, seem to be doing pretty well. Maybe there's a disconnect there. Let's talk about consumer confidence.
How do you see it?
David Anderson, PhD., Texas A&M University
Well, you know, that's an interesting set of data. That survey work has gone back for decades and decades. And so, you know, in that regard, it's a pretty interesting barometer of just, you know, how are people feeling about things?
You know, it's not likely a perfect measure, but you know that it goes back for such a long period of time, it gives you some notion of just what people think. And it has dropped. In fact, it's even lower than like in the late 1970s, early 1980s, when we went through a severe recession in the 1980s, and a period of inflation.
And so, which is pretty interesting in that if that's sort of the measure, you know, any consistency in that, that's kind of a striking measure. But I think it's just, it just reflects what people are seeing. You know, we've had this burst of inflation, we certainly have higher gas prices, we've gone through higher costs throughout the economy, and that's on people's minds.
Jeffrey Snyder, Broadcast Retirement Network
Let me ask you about how important, how tied is this measure to what we just talked about, which is inflation? So if people are feeling less inflation, they're probably more apt to be more confident. But is that the only component to this?
Meaning, does that really shape the consumer confidence, is really that inflation number?
David Anderson, PhD., Texas A&M University
No, I think if we look at it, it's sort of a broad, you know, measure of what people think, how are people feeling. And it could be a drumbeat of a lot of things going on, not just an inflation measure. And so in that regard, it's sort of a, it's an interesting gauge of what people are thinking, but it doesn't, it doesn't reflect inflation, it could reflect just an overall perception of a lot of things.
And so in that regard, it's, you know, I think we got to be careful in how we interpret it. But it is an interesting measure when we put it with everything else.
Jeffrey Snyder, Broadcast Retirement Network
So let's talk about putting it, I want to put it in context with the broader stock market. And I would have thought, and I know they're not, they don't move in lockstep with one another, they're not correlated, I guess is the right word. But markets, stock markets have been doing very well, even with some of the challenges with inflation, with the war, blockades, I mean, you name it, some of the geopolitical events.
How do you tie that back to, because a lot of Americans, not, you know, many Americans, not a lot of Americans, many Americans have investments, they have 401ks, IRAs, 403bs, 457, whatever, they're saving. So they're tied to the broader market. So when that market goes up, you got to feel good.
So how does that tie into the market results?
David Anderson, PhD., Texas A&M University
Well, I think that's an interesting part of it, because, you know, if you're, if your retirement plan is doing okay, and you see the stock market, that can give some, at least one segment of consumers a real positive feeling, because, yeah, they may be paying more at the pump or more wherever. But boy, they can look at that, and that's going up. And I think you make an important point, the stock market is not the economy.
The stock market is, you know, individual stocks of companies. And we have companies that are doing well, they're performing well. We have companies that aren't.
And that's always the case. We've also got some segments that are booming, whether it's tied to the AI boom, computer boom, chips, you name it, those things are booming. And if we look at those broader in indices, that's sort of lifting those indices up, not only but those individual stocks.
So I think it's important to remember, you know, the stock market itself is not the same thing as the economy, but they sure are related.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. And I want to try to tie back to the consumer confidence. If people are spending more at the pump, if they're, you know, they have a general, I don't know, in the 70s, they used to term a general malaise, right?
I mean, you and I are very close in age. But if the consumer is feeling like there's a bit of a malaise, they're facing these pressures, their confidence has slipped. What about spending?
Because, you know, to tie back to the stock market, it's all based on earnings. So it's predictive, or it's a forward-looking measure of earnings. And earnings are really dependent on the consumer a lot of times.
So how does this shape maybe some of those forward-looking measurements that I'm not asking you to predict the results, but like, in terms of earnings, I mean, if people are not able to save, not put money away, there's less money circulating, and they're not able to buy, less money circulating in the economy, which doesn't help these companies.
David Anderson, PhD., Texas A&M University
Yeah, I think overall that's right. It's this, our consumer's ability to spend. You know, we go back and look and something like two-thirds or 70% of our economy is consumer spending.
And so, you know, yeah, we might be spending more and saving less because we have to spend more because it's going to the pump or it's going to whatever. But, you know, it's that income that we have to spend on these other items, stuff we want to buy, that drives a lot of our economy. And so, you know, if we're spending more on basic necessities, we're not spending it on these other items.
And so, that has a, you know, I think that has a drag on the economy. Plus, it probably makes people feel bad because they can't buy some of the things that they want to buy. And so, that generates this idea of confidence and their feelings about their overall situation.
But I do think there's one other thing that's pretty interesting than this as well. And that is just how resilient we are as people. And I think that shows up in the overall economy as well, where there's, by a lot of measures, there's plenty of positive things going on as well.
And so, you know, we have a pretty resilient economy. And the economy is just the, you know, it's the aggregation of all 330 million of us in the U.S. and beyond, because we do trade. And so, you know, we have a lot of resilient people and, you know, resilient economy as a result.
Jeffrey Snyder, Broadcast Retirement Network
So, we're coming up on America 250, and I wasn't really expecting to take in this direction. But do you think that that's the uniqueness of us as a people, as a country? And, you know, you said 330 million, but, you know, looking back, you know, you're not a history teacher, but you're an economic teacher, and there is history involved.
Is that what makes us unique relative to our European counterparts, our peers in Australia, in Asia? It makes us that resilience, that innovation. Is that what really sets us apart economically?
David Anderson, PhD., Texas A&M University
No. You know, maybe that's true. You know, it's, we certainly are, you know, we're, we think back historically, we got, well, I don't want to take this in an immigration sense, but most of our ancestors were immigrants one way or another.
And, you know, if you think about it, we got the people who had that entrepreneurial spirit, were willing to take a chance that rolled the dice on leaving where they were and leaving everything behind and starting over. And so I think that, and I don't think that that resilience as people is unique to us. I think we see that everywhere.
But we are a product of a really folks that rolled the dice and left everything behind and came here to take a chance on building something different. And I think maybe that has stuck with us some. But, you know, I think we see resilient people all over the world.
Jeffrey Snyder, Broadcast Retirement Network
I guess that's why humans have survived for so many thousands of years and hopefully will continue to do so. Let me take it back to, we were talking about and buying. I want to go back to something, another measurement, and this will be my, one of my last questions about credit card debt.
Some people are still spending, they are running up, you know, it's buy now pay later. They're running up credit card debt. I think I just read this morning, it was $1.26 trillion in debt, credit card debt. Does that tell you anything about the broader economy and the consumer themselves in terms of earnings and predictive of the markets?
David Anderson, PhD., Texas A&M University
Well, it probably is a worrisome sign in that, you know, sooner or later you got to pay for that. And, you know, in terms of like, you know, some hard research that correlates that with kind of economic conditions, that's probably not my area to be up on that literature. But, you know, I think common sense would tell us that, you know, with higher prices, people are trying to get by, they use their credit cards more, they, you know, and certainly that, that kind of debt is a real burden on individuals and families and is probably a symptom of trying to get through what we've seen over the last couple of months, particularly at the gas pump, for sure.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, I don't think people are being frivolous. I think they're just trying to get, as you said, just trying to get by, they need to spend their money on wisely. And so credit cards are by now, pay later, are a way, a tool to do that.
Dr. Anderson, we're going to have to leave it there. Thanks so much for, look, I didn't expect to get into history with you, and that was great. But I do appreciate your expert analysis when it comes to macro and microeconomics.
Thanks for joining us. And we look forward to having you back again very soon, sir.
David Anderson, PhD., Texas A&M University Hey, thanks for having me with you.
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This story was originally published June 1, 2026 at 7:30 AM.