Analysis: Fed’s bad-vibe move on improving consumer sentiment: Fewer future jobs 

A consumer finance company reported that Americans are beginning to feel optimistic about the economy, as liberal bankers met in Chicago to argue the hot economy has bad vibes.

The price the bankers are demanding to cool the growth and improve the vibes?

Higher unemployment rates for ordinary Americans.

WalletHub released its economic index reading for September 2026 that surveys 10 components of consumer sentiment.

The WalletHub Economic Index grew 4% between September 2025 and September 2026, showing consumers are becoming more confident about their future financial prospects.

“The over 4% increase in consumer sentiment over the past year is an encouraging sign that our economy is recovering from the damage it suffered as a result of the pandemic and inflation,” said WalletHub analyst Chip Lupo.

Not surprisingly, survey respondents weren’t as optimistic about current financial conditions as they are about how they view financial conditions in six months’ time.

Sentiment about their current employment prospects declined 3.9%, while sentiment about their current financial condition declined 0.3%.

Positive sentiment was highest when people looked at their expected financial condition six months from now.

The number of respondents who said their fiscal condition would improve in six months increased 8.1% year over year.

The index is based on an online survey that WalletHub conducts each month.

Fed’s ‘vibecession’

The results come just a week after economists met in Chicago to talk about the divergence between the data that’s increasingly positive for the economy and American consumer sentiment, which is more dour.

“We’re experiencing record divergence between the vibes and the hard data,” said Austan Goolsbee, president of the Federal Reserve Bank of Chicago, who previously served as the chairman of former President Obama’s Council of Economic Advisers.

Goolsbee made the comments at a conference held at the Chicago Federal Reserve headquarters to study the so-called “vibecession.”

Vibecession describes an economy that is doing well but consumers aren’t feeling comfortable.

One of the attendees at the conference offered a rational explanation for the bad vibes.

“Every time they see a gas station, they know what the price level is,” said Brian Fabes, a senior fellow at NORC at the University of Chicago, according to the Chicago Tribune.

Gas prices, then and now

Gas prices may explain why consumers feel bad now, as demonstrated in the WalletHub survey, but the liberal Fed bankers are giving them another reason to worry about what comes in the next six months.

Goolsbee, for example, used positive data coming out of the economy to make the argument that the Federal Reserve has to shut down job creation to combat high prices.

“This is exactly the painful trade-off between employment and inflation that stagflationary shocks always impose on a central bank,” Goolsbee told an audience in London in September. “Unfortunately, in environments like that, the only way back is the hard way.”

The hard way, as Goolsbee and a growing number of his liberal bankers at the Fed have admitted, is raising interest rates to stop job growth and increase unemployment.

“Forcing inflation back to target in the short run means pushing employment below target,” he told his London listeners.

It’s a pretty bad vibe for consumers to hear the economy is finally picking up, only to learn the Fed’s “hard way” means fewer jobs for workers.

It’s especially bad when you remember that inflation was running at 3.75% in August 2011 when Goolsbee left his post under Obama, well above the 3.35% rate today.

Worse still, Goolsbee specifically cited high gas prices as one reason his economy failed to generate the growth he anticipated.

When he left in August 2011, gas prices were at $3.71, which, when adjusted for inflation, would be $5.49 today.

“We’re in a bit of a slog,” said Goolsbee before leaving his D.C. post. “We took some heavy blows in the first part of the year … and now we’re trying to get the growth rate back up.”

One thing he didn’t have to worry about then was interest rates, which were almost literally zero.

Today, he and the liberal bankers who helped lead the two-decade stimulus splurge that brought inflation are telling consumers the only way forward is higher interest rates, fewer jobs, lower wages and less job security.

He doesn’t want to raise interest rates and kill jobs. He feels he owes it to the American people.

And that may be one reason why consumer confidence perked up 22 points in the six months after he left the Obama job: The bad vibes for consumers were finally gone.