Grocery Bills Sour Public Perception of Economy Despite Broad Gains
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Americans are pessimistic about the economy despite strong economic indicators like low unemployment, rising wages, and declining inflation. Surveys show only 20% think the economy is better than a year ago.
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The Atlantic did a poll to understand why perceptions don't match economic reality. The main factor was grocery prices, which rose 12% in 2022, more than overall inflation.
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Grocery prices likely have an outsized impact because people buy them frequently and see the rising costs often. Also, almost everyone is negatively impacted.
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We haven't seen inflation like this since the 1970s, so economic models predicting consumer sentiment didn't account for rapid food inflation.
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As inflation cools, consumer sentiment has ticked up, but Biden's approval hasn't. So even if people feel better about the economy, it may not help him politically.