Consumer sentiment in the U.S. has plunged to its second-lowest level on record, according to preliminary May 2025 data from the University of Michigan, reflecting widespread concern over inflation, weakened incomes, and the escalating impact of tariffs. The sentiment index fell to 50.2, down from 52.2 in April and nearly 30% lower than in January. PYMNTS Intelligence reports that 60% of consumers expect rising prices, and nearly half fear an impending recession. As a result, 38% are willing to forgo purchases, 31% have switched to cheaper brands, and 14% are relying more on credit cards or buy now, pay later options. The sharpest concern is among paycheck-to-paycheck consumers with difficulty, 46% of whom plan to cut spending. Tariffs now influence the economic outlook of nearly three-quarters of consumers, and year-ahead inflation expectations have surged to 7.3%—a level not seen since 1981. Advertisers can respond to this shift by focusing on affordability, value messaging, and financing options in the consumer goods and financial services sectors.

***Opportunity:
Discount Retailers, Grocery Stores, Financial Planning Services, Financial Institutions, Credit Card Services, BNPL Services