Americans have long believed that, with hard work, anyone can achieve prosperity and success. However, only 25% of people surveyed now believe that they have a good chance of improving their standard of living. This is a record low since 1987.
This change in Americans’ confidence in hard work is a strong indicator of the current American economy because it seems to reflect what people are truly living through. Although employment increased in August and the labor force participation rose to 62.3%, these traditional economic indicators are only a partial picture. If consumers feel uneasy about their own financial situation, job growth could be an indicator of an economic pinch rather than more economic freedom.
Because job growth, labor force participation, and unemployment rates do not necessarily give a full picture of America’s economic standing, some economists rely on Consumer Sentiment surveys to indicate how households are spending money in light of their financial situation.
The University of Michigan uses its Survey of Consumers to measure the index of consumer sentiment. Currently, this index is 58.2, which is 9.9 points lower than in August 2024. For reference, the highest this index has been is 111.3 in February 2000, while the high in 2025 was 71.7 in January. A low consumer sentiment index may indicate that American households are concerned about economic conditions such as rising inflation and prices, as well as high interest rates.
Beyond traditional economic indicators and the consumer sentiment index, surveys such as the one conducted by the Wall Street Journal help gauge how most people think the economy is doing, whether wages are keeping up with inflation, how the national debt is affecting the country, and how far hard work can take you.
For example, in this survey, only 25% of respondents believe they can improve their living standards, and 46% believe that the American dream no longer holds true. This paints a dismal picture that many Americans believe, no matter how hard they work, they cannot reach success or better financial standards.
Despite good economic conditions regarding employment and wages, this pessimistic attitude towards hard work and success has stumped economists in the current economic climate. There is a disconnect between objective economic indicators that have traditionally signalled a strong economy and subjective indicators that are now signaling a fragile and weak economy.
Bottom Line
While a month-to-month look at job growth and economic growth measures may indicate a strong economy, consumers feel the difference in their ability to afford groceries year over year. Employment may have increased over the last year, but many people are striving to keep their current jobs because they hear stories of layoffs. The economy may be strong, but if Americans are afraid they will not be able to retire, buy a house, or support their family, the economy will not feel steady.