America’s middle class is increasingly convinced that the economy is no longer working in its favor. Defined as the middle 60% of households on the national income distribution, or those earning roughly $66,666 to $200,000, this group now faces higher prices, softening incomes and growing doubts about its financial future, even as headline inflation has cooled.
That anxiety shows up clearly in the University of Michigan’s Surveys of Consumers, where overall sentiment fell 29% year-over-year, from 71.8 in November 2024 to 51.0 in November 2025. Views of current economic conditions slipped 20%, from 63.9 to 51.1, while expectations—combining households’ own financial outlook, the near-term economy and long-term performance—dropped 33.7%, from 76.9 to 51.0.
The deterioration has been especially sharp for lower- and middle-income households. In September, the survey reported that easing economic views were particularly strong among these groups, underscoring how they feel the strain from rising costs and weaker income growth more acutely than higher earners.
“After the federal shutdown ended, sentiment lifted slightly from its mid-month reading,” Surveys of Consumers Director Joanne Hsu said in prepared remarks, adding that consumers remain frustrated by the persistence of high prices and weakening incomes.
Prices for goods and services are now about 25% higher than in 2020, according to The Wall Street Journal. And while the inflation rate has eased from its 2022 peak, many middle-class staples such as car repairs, coffee, and certain food products have climbed “markedly” in 2025. That leaves households that once felt secure now feeling squeezed, even when they are still within conventional definitions of the middle class.
At the same time, the flow of official inflation data has been disrupted. The Bureau of Labor Statistics released the September Consumer Price Index in October despite the government shutdown so the Social Security Administration could calculate the annual cost-of-living adjustment, but the October CPI report was canceled. The next reading, for November, will not be published until December 18. The Bureau of Economic Analysis also postponed its October Personal Income and Outlays report, with this month's release scheduled for December 19.
Retailers and consumer brands are signaling caution as they head into the holidays, particularly around the health of the middle-income shopper.
“As we approach the holidays, we know consumers remain cautious,” Target Corporation Chief Commercial Officer Richard Gomez said on the company’s third-quarter earnings call on November 19, noting that sentiment is at a three-year low amid concerns about jobs, affordability and tariffs, even as people still want to celebrate without overspending.
Fast-food giant McDonald’s is seeing similar patterns. CEO Christopher Kempczinski told investors on November 5 that the company remains cautious about consumer health in the U.S. and key international markets and expects these pressures to persist well into 2026.
He described a bifurcated U.S. consumer base, with quick-service traffic from lower-income customers falling by nearly double digits over the past two years, while visits from higher-income consumers continue to rise at almost the same pace—evidence that every segment feels some pressure, but not equally.
“People feel like their living standards are falling behind,” Harvard Economics Professor Stefanie Stantcheva told The Wall Street Journal, explaining that concern about rising prices is particularly strong among lower earners. For the middle class, that mix of elevated costs, uneven income growth and job uncertainty is turning what once felt like stability into a growing source of unease.
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