"People have been put through the wringer these last two years," said Mark Zandi, chief economist at Moody's Analytics. "The sentiment is consistent with a very nervous consumer."

The Conference Board's Leading Economic Index reversed earlier gains and fell in the first half of 2022, signaling that near-term recession risks have grown, the group said. University of Michigan data showed that consumer sentiment tumbled to a record low between May and June, but — perhaps surprisingly — that hasn't translated to a widespread pullback in spending. Retail sales rose in May, likely reflecting the increasing rate of inflation — and the continued ability of consumers to spend.

Although the personal savings rate has dropped significantly from its pandemic peak of 24.8% in May 2020, it remained at 5.4% two years later, and household balance sheets are still relatively strong.

"Sentiment has been a poor guide to spending recently; people with more than $2 trillion in aggregate excess savings might say they are miserable, but they can still go shopping," Pantheon Macroeconomics chief economist Ian Shepherdson pointed out in a recent research note.

"People have been put through the wringer these last two years," said Mark Zandi, chief economist at Moody's Analytics. "The sentiment is consistent with a very nervous consumer."

The Conference Board's Leading Economic Index reversed earlier gains and fell in the first half of 2022, signaling that near-term recession risks have grown, the group said. University of Michigan data showed that consumer sentiment tumbled to a record low between May and June, but — perhaps surprisingly — that hasn't translated to a widespread pullback in spending. Retail sales rose in May, likely reflecting the increasing rate of inflation — and the continued ability of consumers to spend.

Although the personal savings rate has dropped significantly from its pandemic peak of 24.8% in May 2020, it remained at 5.4% two years later, and household balance sheets are still relatively strong.

"Sentiment has been a poor guide to spending recently; people with more than $2 trillion in aggregate excess savings might say they are miserable, but they can still go shopping," Pantheon Macroeconomics chief economist Ian Shepherdson pointed out in a recent research note.