Americans remain pessimistic about the economy six years after the COVID-19 pandemic, despite continued strength in spending and broader economic activity. The University of Michigan Consumer Sentiment Index has never returned to pre-pandemic levels, while the Conference Board's Consumer Confidence Index also fell in September. Consumer sentiment was historically viewed as a useful leading indicator because confidence was expected to influence spending, which accounts for about 70% of the U.S. economy. Chicago Federal Reserve President Austan Goolsbee said that relationship has weakened, prompting economists and policymakers to rely more on objective data such as inflation, hiring, spending and growth. The personal consumption expenditures price index showed price increases stabilizing, while August consumer spending rose 0.9% from July and inflation-adjusted spending increased 0.6%, the strongest monthly gain since March 2025. Bank of America said discretionary spending on goods and services was still increasing. September payroll growth slowed and wages failed to keep pace with inflation, but economists characterized the labor market as a low-hire, low-fire environment rather than a wave of layoffs. Researchers said survey distributions and components such as inflation expectations may offer more useful signals than headline sentiment measures. Goolsbee also called for research into whether survey-based inflation expectations or market-based measures, including Treasury yields, better indicate the business cycle and inflation risks.