U.S. consumer sentiment is at the lowest it has ever been, but what is it?

If you're holding back on spending or worried about losing your job, you are not alone. U.S. consumer sentiment just hit an all-time low this month.

But what is consumer sentiment? Maybe you've heard of consumer confidence. The two are similar but different.

Tyler Schipper, an economics professor at the University of St. Thomas, breaks them down.

"The Consumer Sentiment Index tries to measure how individuals are feeling about their own personal economies both today and in the future, and then groups those up with the experiences of a bunch of other people to try and generalize what that might mean about the economy," Schipper said.

On the flip side, the Consumer Confidence Index measures how people view the economy overall rather than their personal situation. It's conducted by the Conference Board, a nonprofit research institution.

The Consumer Sentiment Index, which is conducted by the University of Michigan, surveys 500 households each month, according to Britannica Money. The Consumer Confidence Index reaches 5,000 households monthly.

The latest consumer sentiment score is 44.8 — the lowest since the survey started in 1952. That means more people are saying they are struggling financially right now, or worry that they will be in the future, than they did during the COVID-19 pandemic, the Great Recession in 2008 and in the days following 9/11.

"It's certainly not a positive indicator for the economy," said Shipper. "Recognizing that the reason why people might be negative in that survey can be very different. Somebody might be responding to they had to fill up their gas tank this morning. Another person might have had their house foreclosed on."

Increased prices at the pump, the grocery store and retail overall are driving the sentiment slide by making it tough on people to cover everyday expenses.

Surveys of Consumers Director Joanne Hsu said that 57% of consumers spontaneously mentioned that high prices were "eroding their personal finances, up from 50% last month. Lower-income consumers and those without college degrees posted particularly strong sentiment declines."

"You would have a hard time convincing me that if I feel insecure in my own personal finances, I feel like I might lose my job, or I don't have enough for my mortgage, that I'm going to go out and buy a new washing machine or a brand new car," Schipper said.

Since people will be saving money for essentials like food or their rent, certain industries might be worried about such a low consumer sentiment. Schipper points to retail, home real estate and car sales/manufacturing.

Schipper says the quick solution to get consumer sentiment trending upward again is to lower gas prices, the cost of goods like groceries, as well as lower inflation. For the long term, he points to job security.

"If you think about your own personal economy, you might be looking to the future as well. And if you think AI is going to take your job in the future, that probably shows up in this data," he said.

Despite the rough outlook, there are many people whose personal finances continue to improve. Their influence on the economy, specifically how they spend, is partly why we haven't entered a recession, said Schipper. 

"That top third (of income earners) is still buying stuff. And so, if you are running a business that's particularly catering towards higher-income consumers, you might be less worried about this data than if you're trying to hit those middle- and lower-income consumers," Schipper said.

Consumer confidence also dipped this month, but not as sharply as in other ways that shoppers rate the economy. At the same time, the stock market is hovering near record highs.