Data indicates that inflation in the United States has currently cooled down, employment performance is good, and salaries have increased. However, The Wall Street Journal reported on October 23 that many American citizens still feel anger towards the prices of goods, and consumer confidence will take some time to recover.
According to data from the U.S. Department of Labor, the inflation rate in the United States has sharply slowed down over the past two years, dropping to 2.4% in September of this year. At the same time, employment and consumer spending remain strong, with average wage growth outpacing the increase in prices.
Even so, there are still many high-cost scenarios in people's lives, including housing, cars, childcare costs, and insurance, which exacerbate people's sense of unease. The Federal Reserve pointed out in the "Beige Book" on October 23 that some signs indicate that Americans are looking for more economical ways to consume.
The Wall Street Journal documented the current living conditions of several ordinary people: Marilyn Huang, a 54-year-old engineer from Doylestown, Pennsylvania, said that she still finds it difficult to adapt to high prices. Like many others, although Marilyn Huang's salary has increased since 2020, the rise in the cost of living has offset the increase in salary, and she has started to save expenses. In the past, Marilyn Huang would hire a professional to trim the shrubs in front of her house every year. Now, the trimming fee of more than $1,000 forces her and her husband to do it themselves.
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Jenny Rickitz, a 56-year-old lawyer, said that high prices have filled her life with various small aches and pains. For example, when buying a box of raspberries, she can always recall the price of $3.99 a few years ago, but now, to buy such a box of raspberries, at least $4.99 is needed.
Christian Cook, a middle-aged man from Leland, North Carolina, feels frustrated every time he is in a grocery store: "I feel like I haven't bought much, but every time I pay the bill, it exceeds $100."
Over the past 4 years, Cook's salary has increased by about 8%, which is lower than the average price. In the past, he and his wife would take their daughter out for fun every weekend, but now they have changed to once a month.
The latest national survey released by The Wall Street Journal on October 23 shows that about three-quarters of the respondents believe that over the past year, living expenses have exceeded family income.
In contrast, financial markets are less concerned, as less than half of American families have stock investment behavior.
The consumer survey conducted by the University of Michigan at the end of September and the beginning of October shows that Americans have significantly reduced their expectations for inflation. At the same time, 44% of respondents said that high prices have worsened their personal financial situation, and this figure was 47% when inflation peaked in 2022."Consumers must be aware that inflation has slowed down," said survey director Joanne Hsu, "but their view of the economy is still troubled by high prices."
Survey data shows that consumer confidence has improved from the low point in mid-2022, but it is still far below the level before the outbreak of the pandemic. As demonstrated by economic scholar Ulrike Malmendier from the Haas School of Business at the University of California, Berkeley: inflation and economic turmoil can have a profound impact on people. Once the high inflation issue subsides, people are expected to resume their previous consumption behavior, "but there will be a kind of invisible trauma left in their minds, which will affect their long-term economic concepts in life."
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