NEW YORK (NY Times) - The
fastest inflation in decades is contributing to Americans’ dour view of the U.S. economy.
Nearly nine in 10 adults say they are at least somewhat concerned about inflation, according to a survey conducted Feb. 1-7 by the online research firm Momentive for The New York Times. Worry about rising prices cut across generational, racial and partisan lines — 85 percent of Democrats and 96 percent of Republicans said they were concerned.
Fear of inflation is weighing on people’s view of their own finances and the economy overall. About 75 percent of respondents rated the economy as fair or poor, and only 28 percent said they expected their own finances to be better off a year from now, the lowest share in the five years Momentive has conducted the survey. Asked to identify the most important issue facing the country, dozens of respondents volunteered inflation, which wasn’t offered as an option.
The findings are consistent with other surveys that have shown a sharp decline in economic confidence in recent months. The University of Michigan’s long-running index of consumer sentiment fell to its lowest level in more than a decade in February, although consumer attitudes improved slightly in the second half of the month.
“People just hate inflation,” said Michael R. Strain, an economist with the American Enterprise Institute. “They hate inflation in a way that I just did not understand until last year.”
Consumers’ pessimism is striking because most indicators, other than inflation, show that the economy has made significant strides in recent months. The unemployment rate has fallen to 4 percent, and job growth was strong in January despite a jump in Covid-19 cases. Wages are rising at their fastest pace in years.