Consumer sentiment is continuing its decline amongst Americans. The University of Michigan’s survey monthly survey revealed sentiment fell to a six-month low of 67.4 in May, down from 77.2 in April. Inflation is the primary reason for the loss in confidence, followed by interest rates and geopolitical issues.
Incoming data would lead one to believe inflation is waning from historic highs above 9%, but the average consumer realizes that prices are nowhere near pre-pandemic levels. Taxes are also rising among all income levels, yet this is never accounted for when measuring inflation or the cost of living.
Shelter costs are one of the main factors driving up the cost of living for the average American and are the primary source of pay drain.
The Labor Department’s April jobs report failed to meet expectations, while the unemployment rate rose to 3.9% from 3.8% in March. This does not account for the nearly 8 million new arrivals who are unable to work and rely on US taxes for survival. Then we have Biden signing countless legislation to curb America’s gig economy which has made it increasingly difficult for the working class. All of those under the table jobs will be long done once we move to a cashless society.
The Federal Reserve has repeatedly stated that there is simply no evidence to suggest that lowering interest rates could help stabilize prices. The Fed has been issuing the same message after each Federal Open Market Committee — they’re hopeful but do not see the results yet, or in other words, please don’t lose full confidence in our economy just yet despite the clear issues we face now and will face going forward.