Ever since the COVID-19 pandemic reached American shores. The Economic in the country has been shaky, with many Americans feeling downcast. Despite the improvement, many still express pessimism about the state of the economy.
A Gallup survey showed that public confidence had reached its lowest. The last time similar sentiments were echoed was during the end of the Great Recession in 2009. The survey was held amid gas prices breaking records. Elevated inflation, a downward spiral in the stock market, and government reports of declining economic growth.
“Low unemployment is a rare bright spot,” noted Gallup. “But employers are still struggling to find workers to fill needed jobs, which is contributing to ongoing chain problems.”
The pessimism can be traced to the hiking interest rate and increasing commodity prices. Both products of Russia’s invasion of Ukraine. Additionally, economic activities contracted three months into 2022, with imports rising and exports falling.
Despite the number of concerns piling up, economists have downplayed the risks of a downturn. For example, Moody’s Analytics and Wall Street Journal economists wrote that the odds of a recession are at 30%. In addition, Peter Boockvar, the chief investment officer of the advisory firm The Bleakley Group, released a report that said:
“In the debate over recession, no recession/soft landing, hard landing. It all comes down to the behavior of the U.S. consumer. Lower-income households will certainly be most impacted by the direction of real wages. While upper ones will most likely be influenced by the direction of the stock market from here. Those in the middle will get impacted by both.”
“Inflation remains top of mind for consumers. With their inflation expectations in May virtually unchanged from April’s elevated levels,” said Lynn Franco. Senior director of economic indicators at The Conference Board. “Looking ahead, expect surging prices and additional interest rate hikes to pose continued downside risks to consumer spending.”
U.S. economist Mahir Rasheed of Oxford Economics predicted consumer sentiment will likely remain cynical. Until price pressures ease late this year or early 2023. Meanwhile, David Kelly, chief global strategist at JPMorgan Asset Management. Says he expects inflation to slow its current annualized rate from 8% to 4% by the fourth quarter.