Consumer sentiment crashed while labor markets stayed tight. What gives?

The University of Michigan sentiment index dropped hard in 2023, but employment stayed strong, wage growth stayed positive, and real consumption kept climbing. Everyone noted the gap. The usual story was that people felt bad for reasons the data couldn't capture—vibes, news diet, social media dread, whatever. But I keep running into a measurement problem that might be doing more work than the narrative allows. The Michigan survey asks about "economic conditions in the next year" and "next five years." That's a forward-looking question with a very short track record of accuracy. During much of 2023, inflation had just come off a 40-year high. Interest rates were climbing fastest in decades. Even if you personally had a job, the visible economic scenario looked genuinely unstable—not ambiguous enough to dismiss consumer anxiety as pure sentiment detachment. Then there's the distribution question. National aggregates hide what's happening at different income levels. (Bivens and Zipperer have done good work on this.) If sentiment was getting hammered in the bottom two quintiles while top earners stayed confident, the aggregate disconnect looks worse than the actual lived experience gap. I haven't seen the Michigan folks publish clean crosstabs by income and sector for that period, which seems like an oversight. The other thing: are people answering a question about "the economy" or their own financial situation? Those aren't the same, and the phrasing matters more than we usually admit. I'd want to see whether the gap disappears when you ask about personal finances specifically, not national outlook.