A RECORD number of households are grappling with uncertainty about the U.S. economic future. Many anticipate that inflation will erode a larger portion of their incomes, and the prospects for a comfortable retirement are at their lowest in a decade.
Americans are feeling financial strain due to the high cost of living and elevated borrowing costs, compounded by the unpredictability of an election year, according to recent data from the University of Michigan.
Although consumer sentiment reached a four-month high in early September, buoyed by expectations of milder short-term inflation and potential Federal Reserve interest rate cuts, the measure of current conditions remains close to its historical lows.
The survey from the university reveals that Americans' current anxiety is unprecedented, surpassing even the levels seen after the Great Recession or during the immediate aftermath of the pandemic in some respects.
Despite a slowdown in the rate of inflation, prices remain significantly higher than they were before the pandemic, with the consumer price index having jumped 21.5 percent since the end of 2019. Although incomes have risen, consumers feel they are not making substantial progress.
The Michigan survey indicates that the proportion of consumers who expect no income growth after inflation over the next five years is at a record high.
Even as stock prices near record highs, the likelihood of a comfortable retirement is the lowest since 2013. Not all Americans are investors or have retirement accounts that have benefited from the surge in equity prices since the pandemic.
