BIDENOMICS IS WORKING: Consumers are so demoralized by inflation and high rates that they’ve given up on saving for the American Dream and are spending money instead, economist says.
Joanne Hsu, who is the director of the University of Michigan’s consumer sentiment survey, told CNBC on Friday that she thinks Americans have abandoned plans to save money as they see their financial goals look less attainable and are spending money instead.
“This positive spending is not a reflection of some sort of internalized secret sense of confidence that consumers have,” he explained. “And instead my interpretation is that consumers see that a lot of aspirational goals that we talk about as part of the American Dream—homeownership, paying for college, paying for college for your kids, having a comfortable retirement—with high prices and high interest rates right now, those aspirational goals just feel increasingly out of reach.”
And as a result, consumers have “given up” on saving for those goals, Hsu added, noting that the still-strong labor market allows them to spend now.
The unintended (and ironic) consequence is that the front-loaded aggregate demand is inflationary.
88% of Americans say U.S. in on the wrong track, national Monmouth Poll says
h/t BoatyMcBoatface