Consumer sentiment fell to 47.6, down from 53.3 in March, according to a preliminary reading of the University of Michigan Consumer Sentiment Index for April released last week. Consumer sentiment is now down 10.7% from a month ago and nearly 9% from a year ago.

Yet, unemployment is low. At 4.3% in March, the unemployment rate is below where it was for much of the 1990s and 2000s.

Inflation, too, has come down. At 3.3% for the year ending in March, it is a little high, but nowhere near the levels seen in the late 1970s, when President Jimmy Carter’s popularity tanked because of high prices.

Then, analysts created the “Misery Index” to reflect the economic struggles of the public. The index is the sum of the inflation and unemployment rates.

Today, consumer sentiment is higher than would be predicted by the Misery Index.

One obvious reason that sentiment might be depressed is that, even though inflation has subsided in recent months, households have not yet adjusted and are still suffering from the high price level caused by the recent major inflation bout.

“We know sentiment and behavior aren’t always well aligned and that misalignment has occurred, perhaps more so in recent years, but the sentiment reflects a number of things that are very real,” Mark Hamrick, senior economic analyst at Bankrate, told the Washington Examiner.

He noted that prices are up about 25% from January 2020, a massive change that families have yet to absorb.

Some of those are prices families might be encountering just now for the first time since before inflation took off. For instance, the price of a used car has increased by nearly 29% since January 2020, while shelter costs have skyrocketed by over 31%. Many families might not have needed a new car or house since before 2020, and now are getting hit with sticker shock.

But staples are also far more expensive. For instance, a shopper is paying 66% more for steaks at the grocery store right now than they were in January 2020. And eating out hasn’t gotten any cheaper. The average cost of a meal at a restaurant has shot up by more than 35% in that same time.

Still, the high price level does not go all the way to explaining why households are gloomier now than during the Great Inflation of the 1960s and 1970s or during the Great Recession.

“I think that you can probably describe what’s going on as a bit of a ‘vibepression,’” Hamrick said.

One possible explanation for the discrepancy is that the pandemic did something to lower sentiment.

Joanne Hsu, the University of Michigan survey director, told the Washington Examiner that the pandemic signaled a distinct shift in sentiment readings.

“If we zoom out a little bit, sentiment has been fairly low relative to a decent number of economic indicators ever since the pandemic,” she said. “So it really started in 2020, 2021, when sentiment plunged.”

Hsu said that a lot of economic relationships “kind of broke” during the pandemic.

Hsu said that, in talking with her colleagues in the communications and psychology departments, she has learned about societal changes that could play a role in the sentiment readings. She pointed out declining trust in institutions and changing attitudes toward the government.

“So there are a lot of things about American society that measurements thereof have deteriorated over the last few years,” Hsu said.

One clear factor is that sentiment among Democrats has plunged during the second Trump term. It has also fallen among independents.

The war with Iran and its effect on oil prices are also likely eating into sentiment, Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics, told the Washington Examiner.

“It’s the fact that there’s another expectation that there will be further inflation that I think is related to a foreign policy adventure that the average person on the street probably could not articulate to you what was the purpose, and whether or not the outcome is likely to be a net positive for the American people or for their particular interests,” he said.

Hendrix also surmised that artificial intelligence might be playing a role in the perceived mismatch in sentiment readings. He said that enthusiasm about AI is driving up equity prices and causing the stock market to look strong, but consumers might not be as keen on AI because they could fear job losses.

“A little under half of the population doesn’t own any stock, even indirectly,” Hendrix said. “So you know, for them, the equities markets are not necessarily something that they pay any attention to, because it has no material consequence on their bottom line.”

Hsu also said that the increased use of algorithmic social media feeds could be playing a role in sentiment being so low.

TRUMP SETS STAGE FOR SHOWDOWN WITH POWELL OVER WHO RUNS THE FED IN MID-MAY

“And so that generates a more polarized, more emotionally triggering environment,” she said, noting that consumers might be more inundated with news about inflation.

“And indeed, when we ask questions specifically about what news have you heard about the economy, in the post-pandemic period, peaking in 2022, the share of consumers who said that they heard negative news about inflation was twice as high post-pandemic than it was in the late 70s,” Hsu said.