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Americans Are Feeling Worse About The Us Economy Amid Inflation Concerns

US consumers are becoming increasingly worried about the trajectory of the US economy amid sticky inflation and the prospect of high interest rates for longer than initially hoped. The latest University of Michigan consumer sentiment survey released Friday revealed a 13% decline in overall sentiment during the month of May. The index reading for the month came in at 67.4, its lowest level in six months, and well below economist expectations for a reading of 76.2.

Us Economic Output Hits 2-Year High

The US economy is defying expectations amid concerns of a slowdown. S&P Global’s flash US composite PMI, which captures activity in both the services and manufacturing sectors, came in at 54.4 in May, up from 51.3 in April. Economists had expected the index to remain largely unchanged in May. Instead, it hit a 25-month high. Both the services and manufacturing sectors were in expansion mode, with services driving most of the gains for the composite index. The services component of S&P’s report showed the index registered 54.8 this month, up from 54.2 in April. Manufacturing activity hit a reading of 50.9, up from 50 in April.  

Inflation Cools But Rising Prices Still Dominate Americans’ View Of Economy

Inflation cooled somewhat last month. That’s according to new numbers from the Bureau of Labor Statistics. The Consumer Price Index rose at an annual rate of 3.4 percent. That’s in line with expectations. But, overall, inflation hasn’t yet come down quite to the levels that many people have been hoping for.

Why People Think The Economy Is Doing Worse Than It Is

The U.S. economy is in good health, on the whole, according to national indicators watched closely by economists and business reporters. For example, unemployment is low and the most recent jobs report from the Bureau of Labor Statistics shows stronger than expected hiring at the end of 2023. Yet news reports and opinion polls show many Americans are pessimistic on the economy — including in swing states that will loom large in the 2024 presidential election. Some recent polls indicate the economy is by far the most important issue heading into the election.

Is The Economy The Issue, Or Is The Problem With America's Perception?

This holiday season, politics at the dinner table should probably be avoided. However, there is a good chance the economy will be brought up by someone in your family. If that family member mentions how expensive things have become or how the economy is bad, they wouldn’t be alone. A survey from Fannie Mae in November found that 78% of Americans believe the economy is on the wrong track. But is it? Or, is the real problem Americans’ perception of the economy?