The most recent CNBC All-America Economic survey (an indicator of American perceptions of the economy and economic indicators) found that almost seven out of every ten adults currently have a negative outlook on the U.S. economy, the highest level in the poll's 17-year history. Two thirds of individuals polled believe their wages are falling behind the level of inflation, while another two thirds of people believe the economy is either headed for a recession or already in one. This data comes after the Fed raised interest rates for the ninth consecutive time last month in its attempt to tame inflation, which appears to be cooling according to the latest data, showing a decline from 9.1% in June of 2022 to 5.0% last month. Despite the decline in inflation over the last year or so, Americans are still modifying their spending habits. According to the poll, individuals are now spending less on entertainment and travel, and are less likely to buy a car or home due to higher interest rates. While the Fed's efforts to lower inflation come at a cost, the U.S. economy is showing its resilience, as unemployment dropped from 3.6% in February to 3.5% in March, adding 236,000 new jobs.
https://thehill.com/business/economy/3956526-record-69-percent-holds-negative-views-of-us-economy-survey/
5 comments:
I feel like it is also important to note that the US economy is still showing resilience, with unemployment dropping and new jobs being added. The decline in inflation is also a positive sign, although it's important for policymakers to continue to monitor the situation and make adjustments as needed to ensure sustainable growth.
The decline in inflation with jobs being added and a decline in inflation rate the economy can have hope. Officials must continue to watch and make decisions based on how it is progressing or if there is a crash jump on it early to avoid falling into another decline that can result in a recession.
Hello Connor,
This is a very interesting stat and one that I would certainly fall into. I also believe that the economy is either in a recession or will be in one within the next year. The reason is that although wages have risen over the past year, so have the prices of consumer goods - aka inflation. We are now at a point where businesses are starting to slow down their increase in wages. Additionally, the housing market prices have seen a large increase, without a similar increase in wages.
When people see the federal reserve continuously raise interest rates, they believe that inflation is still soaring. Essentially, when you tell people to prepare for a rainy day, they will. Consumer spending has decreased due to inflation but ALSO because people believe there will be a rainy day soon (recession).
Overall, good post.
Real wages have been dropping as raises have not been keeping up with the high inflation. Consumer spending has been flat so maybe people are starting to prepare for a recession if one is to come soon. With the Fed staying on its course of increasing rates, an artificial recession may very well be on its way.
Although the economy shows great signs of resilience, I am concerned about the negative consume perception of the state of the economy, and believe that this would prove to be deleterious to economic growth due to the possible ramifications of of a lowered consumer confidence on consumption in the economy
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