It’s taken awhile, but Americans appear to be feeling better about the U.S. economy.
A measure of how consumers are feeling done by the University of Michigan has climbed by more in the past two months than at any time since 1991, the Associated Press reported. A survey by the Federal Reserve Bank of New York found that Americans’ inflation expectations are as low as they’ve been in three years. The same survey, released last week, showed the proportion who expect their own finances to improve a year from now is at its highest level since June 2021, the AP reported.
Economists say consumers appear to be responding to factors such as a steadily slowing inflation rate, lower prices at the gas pump and a rising stock market. Inflation has dropped from a peak of just over 9% in June 2022 to 3.4%. According to the Federal Reserve’s preferred price gauge, inflation has reached the Fed’s annual 2% target when measured over the past six months.
“While falling inflation took some time to feed through to consumer sentiment, it appears the good news is finally getting through,” Grace Zwemmer, an analyst at Oxford Economics, told the AP.
Despite the dropping inflaton rate, it’s not all good news. Prices are still nearly 17% higher than they were three years ago. Though some individual goods are becoming less expensive, overall prices will likely remain well above their pre-pandemic levels.
