“Americans ‘Feeling the Turnaround’: Economy & Inflation Going Up!

Americans seem to be feeling more encouraged regarding the nation’s economic health and inflation.Recent polls show that confidence in the economy has bumped up, despite a turbulent few years. This optimism may be due in part to the rise of the stock market, the relatively low unemployment rate, and the consumer price index (CPI) remaining under 2 percent all the way through 2020. According to the National Centers for Economic Indicators (NCEI), the consumer confidence index (CCI) ended last year a full four points higher than it had started – its highest since the start of the pandemic – and remains at its peak into 2021. This indicates that consumers are feeling more confident in the stability of the financial markets and US economy. Additionally, many Americans have seen their wages fall less than anticipated despite the disruptions caused by the pandemic. A survey conducted by the National Bureau of Economic Research (NBER) showed that 30 percent of private sector workers saw no decrease in income during the downturn; over 40 percent saw a drop of five percent or less, and a surprisingly low 18 percent faced a more significant decrease of twenty percent or more. At the same time, inflation has remained relatively low throughout 2020, and continues to remain under the 2 percent mark. The gentle growth has allowed people to save and invest somewhat safely, as price increases have not erased any potential gains made during the pandemic. The danger now is that more aggressive economic policies may be enacted which could drive up inflation and dampen consumer confidence. It’s important to monitor the situation to ensure that the economy continues to grow slowly and sustainably, without a significant drop in confidence across the country.