Spending Is Recovering, But Brand Trust Remains Deeply Scarred

This month, the University of Michigan's Consumer Sentiment Index climbed from 52.2 to 60.5, its highest level since the Federal Reserve began its rate-hiking campaign in 2022. The increase has been greeted with enthusiasm by advertisers and executives, prompting many CMOs to expand advertising budgets, double down on performance marketing, and prepare for what is being seen as a rebound in consumer confidence.

Yet beneath the headline numbers lies a more nuanced and potentially hazardous story. Analysts and behavioral economists warn that conflating a rebound in sentiment with a recovery in brand trust and purchasing loyalty could lead companies into costly miscalculations.

According to the McKinsey Global Consumer Pulse, published in May 2025, many consumers report feeling financially stable again—but simultaneously admit they are one unplanned emergency away from financial distress. "Consumers feel rich again—but still think they’re one emergency away from broke," the report noted.

A deeper look at the numbers illustrates this point. While the Consumer Sentiment Index now stands at 60.5, the Current Conditions Index is at 63.7, and Expectations have climbed to 58.4. However, both sub-indexes remain approximately 20% below pre-inflation benchmarks, revealing that while optimism is returning, it is doing so cautiously.

Meanwhile, inflation expectations have decreased to 5.1%, according to MarketWatch and the Wall Street Journal. This decline suggests a certain degree of relief among consumers, yet volatility in economic sentiment remains high.

“Any brand misstep right now doesn’t just cost you a sale,” said Ana Andjelic, brand strategist and former Chief Brand Officer at Banana Republic. “It costs you trust velocity.”

The sentiment spike is easily misinterpreted. Trust is not sentiment. Loyalty is not implied by an uptick in consumer hope. Marketers would be wise to distinguish between temporary optimism and durable engagement.

The consumer of 2025 is fundamentally different from the consumer of 2019. The financial and emotional toll of the 2020–2024 period—marked by a pandemic, recession, supply chain instability, layoffs, and inflation—has rewired purchasing behavior.

Younger cohorts, particularly Gen Z and late millennials, now scrutinize purchases with the diligence of B2B buyers. They rely on peer reviews, value alignment, and transparent supply chains. According to the 2025 Edelman Youth Trust Index, 84% of Gen Z say they immediately abandon brands they perceive as misaligned with their values.

In this context, mass marketing becomes a liability rather than an asset. Messages aimed at broad audiences risk feeling tone-deaf or insincere. The more effective approach is emotional precision—speaking directly to specific fears, aspirations, and identities.

Marketers who interpret this climate as a greenlight for high-volume campaigns may be walking into a cultural minefield. The challenge of 2025 is not lack of consumer attention. It is lack of consumer alignment.

Some companies are adjusting in real time. Nike, for instance, has shifted its TikTok strategy from traditional advertising to values-first content. It is less about shoes and more about identity—positioning its brand within cultural narratives about confidence, resilience, and self-expression.

BeReal, the authenticity-focused social app, has invested in platform integrity over promotional spending. Rather than chase ad revenue, it has engineered features that build trust through product experience. This trust-by-design approach has bolstered retention and virality.

Fashion giant REVOLVE, following boycotts over labor practices in 2023, rebuilt its reputation by publishing comprehensive supply chain disclosures and inviting Gen Z designers to participate in product development. These changes transformed the brand narrative from reactive to proactive, and sales have since rebounded.

Liquid Death, the beverage company, executed one of the most memorable trust-building campaigns by hosting a mock funeral live-streamed with Discord creators. Rather than talk about water, it positioned the brand as a cultural event—earning over $200 million in revenue, according to company filings.

To operate effectively in this new environment, some agencies are building what they call “narrative infrastructures.” One such framework, developed by The AJ Center, is called the EchoSystems™ Model. It treats culture not as a backdrop for advertising, but as the medium of brand construction.

Step one is decoding the sentiment spike. Brands must identify which elements of consumer behavior reflect recovery and which remain shaped by trauma. Cross-referencing data from the University of Michigan Index, McKinsey, and Edelman allows firms to map emotional volatility with greater accuracy.

The second step is targeting emotional use cases rather than demographics. What hidden anxieties can the brand address? What unmet aspirations does it reflect? Companies like Glossier have done this by shifting focus from scale to softness. Following restructuring in 2022, the company pivoted to emphasize community-led product development. This emotional alignment has driven a 40% increase in average order value, according to Glossy.

The third component is what The AJ Center calls micro-gravity engagement. Instead of chasing mass attention, brands build magnetic presence in niche spaces: Reddit AMAs, Discord events, Substack newsletters, or TikTok docuseries. These environments allow brands to grow from within culture, not above it.

Furthermore, companies are learning to treat spending as symbolic. Products are now proxies for belief. Campaigns such as merch drops and community badges are not just for revenue—they’re for identity signaling.

Lastly, transparency is a form of trust insurance. During bipartisan calls to ban TikTok in 2024, the company launched privacy dashboards, API audits, and open-source toolkits that demystified its data practices. This proactive visibility helped TikTok secure over $22 billion in ad revenue last year, as reported by the Wall Street Journal.

The rebound in consumer sentiment marks an important milestone in post-pandemic recovery. However, marketers who mistake it for a return to normalcy risk losing more than just market share. In today’s volatile environment, brands are not just selling products—they are selling trust, meaning, and alignment.

As consumer optimism returns, expectations rise with it. This is not the time for brand volume. It is the time for brand vulnerability, empathy, and precision.

Those who succeed will be brands that understand culture not as something to market into, but as something to live within.

At The AJ Center, this philosophy translates into engineered EchoSystems™ that grow belief, not just visibility. Narrative is not a wrapper—it is infrastructure. And in a world where sentiment is rising but skepticism endures, infrastructure matters more than ever.