Why are people so gloomy about the economy?


There are a lot of jobs available in this economy for people looking to get back to work. Or those who are willing to tell the boss “I’m quitting” and get a new one.

But, in the not-so-good news department, this week we had this surge in consumer prices – inflation at 6.2% year-over-year. It’s a level we haven’t seen since the early 1990s.

More not so good news came on Friday, this time from the University of Michigan. Consumer confidence fell to its lowest level in 10 years in early November.

Incomes are up and layoffs are down. Prices are up, and confidence is down.

“There’s this weird push-pull, people are like, ‘Oh no, I’m fine, but it’s all terrible,’ said Chris Jackson of the Ipsos polling firm.” The personal situation of consumers is actually pretty good. , but their view of the economy as a whole continues to be somewhat dire. ”

And the price increases are pretty dire – affecting everything from gas and groceries to rent and utility bills.

The latest consumer sentiment survey shows, according to Mark Hamrick of Bankrate: “One in four consumers cited reductions in their standard of living linked to inflation.

A lot of people have received increases; the average hourly wage has increased by about 5% over the past year. But the prices are even higher.

Despite their bleak outlook, consumers shop, according to Columbia Business School’s Mark Cohen.

“People go out to buy things that they haven’t had use for because they are going out,” Cohen said. “People are going back to work, they are buying gasoline. They are frustrated that they cannot find a new car.

But they want a new car, clothes and gifts for the holidays. In fact, this high demand is one of the main reasons supply chains are disrupted and prices are skyrocketing.

Behind it all, “COVID is still the 800-pound gorilla in the room, the key player in the economy right now,” said economist Robert Frick of the Navy Federal Credit Union. “It will definitely bother us this winter.”

COVID is still pushing many people away from the workforce and out of shops and restaurants … and worried about what will happen to their jobs if the pandemic worsens again.


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