1. American workers' wage expectations declined to $74,236 from $82,135. 2. 44% expect higher unemployment within a year, the highest since April 2020. 3. 15.7% perceive a job loss probability, the highest level since March 2024. 4. Consumer sentiment is weakening, influenced by tariffs and trade tensions. 5. IMF increased U.S. recession probability to 37%, up from 25%.
Lower wages and increasing unemployment expectations typically lead to reduced consumer spending, adversely affecting corporate earnings across the S&P 500, similar to the trends seen during the 2008 financial crisis.
Declining wage expectations and rising unemployment significantly impact consumer sentiment and spending, which are crucial for S&P 500 company earnings.
Immediate consumer sentiment impacts are likely to affect market performance in the coming quarter, as seen during previous economic downturns when negative consumer sentiment precedes broader market declines.