At the heart of Pinterest (NYSE:PINS) is a real-time consumer sentiment indicator in that users share with others visually attractive items or experiences they aspire to own or enjoy. Therefore, if PINS stock is taking a beating, what does that tell you about the underlying consumer economy? If you said nothing good, you’re probably on the right track.

Currently, market analysts are debating whether or not a recession is on the horizon. In the bearish camp, the argument is easier to make. With rising inflation crimping consumer sentiment, the concept of retail revenge — or people opening their wallets to make up for lost time due to the coronavirus pandemic — absorbed a major blow.

But the bulls aren’t exactly out of ammunition. Time and again, we’ve seen market meltdowns eventually translate to lifechanging buying opportunities. Certainly, those who stood on the sidelines during the initial wave of the pandemic in 2020 lost out on serious gains. By deduction, PINS stock could be a discount at current levels.

So, which argument holds the most water? While I appreciate the historical bounce-back argument, the reality is that the context has changed dramatically. Before the Great Recession, it wasn’t unusual for residents of major metropolitan areas to pay about a quarter or so of their income to residential expenses. Now, this ratio has likely accelerated to 40% or more.

When you have people spending 40% of their income on rent or mortgage payments, that is likely an unsustainable situation. But that’s not all. On top of this outrageous jump in living expenses, people now must pay an unheard of spike in every other critical product category like energy and food. Combined, the new normal leaves very little funds available for discretionary purchases.

Therefore, that PINS stock is hurting so badly implies that people aren’t even interested in fantasizing about the purchases or experiences that they normally would desire if the world hadn’t gone to perdition. But because of our harsh reality, investors ought to be super careful about Pinterest in the near to intermediate term.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.