“Oh, stay jealous babe. Stay jealous, honey. Jealousy is a disease, remember that, Diamond. I’m just gonna go chill in my mansion or whatever, you know, no big deal!”
Anora, the titular character from last year’s Best Picture Oscar winner, thinks she’s found her ticket to the high life when she elopes with the son of a Russian oligarch. Returning to the New York City strip club where she once worked, she flaunts her wedding ring and newfound wealth, convinced that she’s “made it.” But like all things that seem too good to be true, Anora’s naïve dream is soon met with harsh reality after her husband’s family discovers the marriage and enacts a plan to get it annulled. For director Sean Baker, the film is one of many in his catalog that follows ordinary people on the margins of society, trying their best to find success. In an interview with NPR, Baker aptly describes his work as being about, “…people who are chasing the American Dream, but don’t have easy access to it.”
As the shutdown flirts with record territory, we’re intimately familiar with having zero access to the official standard data docket. At least we were able to feast on September’s inflation data, albeit a few weeks late. The lower-than-expected 3% YoY headline heartened investors clamoring for additional easing at this week’s FOMC. In turn, all three major stock indices closed the week at record heights. For the top 1% who own more than half of U.S. stocks, this was a welcome development in an economy that looks less k-shaped and more “i”-shaped with each passing day. The final readout of the University of Michigan’s (UMich) October survey data further illustrated this divide.
As part of its questioning, UMich asks consumers to rate their current situation as well as their near-term (12 months out) and long-term (5 years out) expectations. The top-left chart focuses on long-run expectations for consumers’ Financial Situation. Both the “haves” (upper-income tercile) and everyone else (lower/middle-income) saw their expectations collapse in the wake of April’s “tariff terror,” which quickly rebounded thereafter. However, lower/middle-income expectations have since fallen further, with October’s 92 marking a series low in data to 2011 (purple line). And while upper-income households are relatively more sanguine, their 114-print was nonetheless the fifth lowest on record and well below the long-run average of 140 (orange line).
What’s interesting to us is that long-term expectations for financial security have been on a general downward trajectory in the post-COVID era; this in spite of stocks’ healthy gains in recent years and increasing stock ownership. A recent special report from the University of Michigan found stock ownership increased from 67% to 74% of households from 2019 to 2024, and noted that “[over] the past two years, soaring asset values have influenced the attractiveness of investing in risky assets, with major stock indices reaching one historic high after another.” Perhaps, in the wake of 1) fears of being replaced at work by AI, 2) stubborn housing unaffordability, and 3) inflation corroding buying power, households have been compelled to invest more aggressively just to keep up?
To address their financial insecurity, the bottom two income terciles have also levered up. The top-right chart compares the share of households describing their financial situation as worse than a year ago due to “Current Higher Debts” relative to the long-run average. Though a volatile series, there’s clearly been an upward course for lower/middle-income households, meaning more are flagging debt as an issue vis-à-vis the norm (red line). In fact, the current 4.64 marks a post-pandemic high with just two precedents: November 2015 and October 2016’s identical 5.14 prints. On the flip side, upper-income’s current 0.41 is not terribly out of line with the average (green line).
Another real-time consumer sentiment gauge we tap is the Penta-CivicScience Economic Sentiment Index (ESI), which continuously collects responses and updates on a bi-weekly basis. The latest print, as of October 21, marked a one-point drop to 30.9, a new low for 2025. Furthermore, the “Major Purchases” index fell 2.9 points to 22.5, within spitting distance of the record low 22.2 reached in early May (yellow line). This sudden pessimism on major purchases goes hand-in-hand with deterioration in UMich Household Durable Buying Conditions. They’ve collapsed 19 points in the last three months to October’s 72, making plain that more households have no choice but to hit the “pause” button on big-ticket spending (blue line).
Similar sentiment plagues autos. In the post-pandemic era, the percentage of households flagging now as a bad time to buy peaked at 81% in June 2022 but came down as dealers’ lots replenished. However, since bottoming at 55% in March 2024, they’ve steadily climbed back to 73% (pink line). As detailed in our most recent Quill, a lack of relief on the sticker shock front continues to drive consumers’ reluctance. To illustrate, Manheim’s Used Vehicle Value Index rose 88% from its COVID low in April 2020 of 137.2 to its December 2021 peak of 257.7 (teal line). It has yet to fully normalize with the current level of 203.6 an unsettling 27% higher than its long-run trend to 1997. And while automakers Ford and GM reported better-than-expected earnings last week, they also announced layoffs. So too, did Rivian, as electric vehicle demand continues to sour.
When Anora was released last fall, The Atlantic did a profile on Sean Baker, stating that his movies “reveal the so-called American Dream to be a moving target, a seductive tease.” The bearishness on display in the UMich data concurs demonstrating that countless households are losing the budgetary battle. And while we don’t have up-to-date jobs data, we do have Google search intensity for “file unemployment,” which keeps climbing, bucking seasonal trends. Target’s first layoff in a decade—1,000 positions and 800 forgone backfills—is the latest big-name addition to a distressingly long list.