Joanne Hsu, director of the University of Michigan Surveys of Consumers and research associate professor at the Institute for Social Research, specializes in the fields of household finance, consumer sentiment and the impact of economic expectations on the national economy.

Hsu joins the Michigan Minds podcast to discuss her findings on current consumer sentiment, offering insight into persistent high prices and how the labor market is shaping the way Americans manage their budgets today.

How do you see consumers responding to these additional budget constraints?

The number one factor on consumers' minds is the persistence of high prices and tariffs are a major factor in that. Inflation, however, has come down, so Inflation being the rate of change of prices as opposed to just the price level itself, so inflation has slowed down quite a bit since 2022.

But that doesn't mean prices have come down; prices have remained high and that's something that consumers continue to be very frustrated about. The thing is, we all want prices to come down, but historically speaking, it's really hard for prices to come down without something catastrophic happening in the economy, like a major recession. And a major recession will surely affect everyone in a very negative way.

I think sometimes it can be hard for people who watch the macroeconomy, including policymakers, to square the fact that inflation has come down, but people are still so unhappy about how prices are eroding away at their living standards.

Michigan Minds is produced by Greta Guest and hosted by Juan Ochoa. Jeremy Marble is the audio engineer and Hans Anderson provides social media animations. Listen to all episodes of the podcast.

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