Topline
For the first time in more than a year, Americans’ inflation fears have not increased, according to a new Gallup poll, as high prices, led by the cost of gas, continue to fall heading into the holiday season—although economists still predict high-interest rates and inflation could bring the economy into recession.
More than half of Americans in a Gallup poll said inflation has caused financial hardships.
Key Facts
55% of American adults who responded to the Gallup poll said recent price increases have caused financial hardships for themselves and their families, compared to 56% of respondents who said the same thing in August, although it’s the first time that Americans’ concerns have not increased since Gallup first asked the question last November.
13% of respondents in the poll, which surveyed 1,800 U.S. adults between Nov. 9-27, indicated high prices have caused severe hardships that have affected their standard of living—a one-point increase from August.
Among respondents who identify as lower income, 77% said price hikes have caused hardships—a three-point increase from August—while 44% of middle high-income and 60% of middle-income respondents indicated inflation has caused financial strain.
28% of low-income respondents said those hardships have been severe, well above the 13% of middle-income and 6% of high-income respondents who said the same.
77% of lower-income respondents said inflation has caused financial harships.
Key Background
High inflation has cooled slightly in recent months, led by plummeting gas prices, after hitting a 40-year high in June. Even by May, roughly 70% of Americans viewed inflation as at least a “large problem,” according to a Pew Research Center survey. In August, President Joe Biden signed the Inflation Reduction Act, a $437 billion piece of legislation championed by Congressional Democrats that also addressed climate change initiatives and prescription drug costs. A Morning Consult poll of U.S. voters, however, later found 57% of respondents believed the act would have no impact on inflation or make it worse. Nearly a quarter of respondents in a Gallup poll released in September said they have cut spending as a result of high prices, with 17% saying they have driven less and canceled vacation plans. Recession fears among economists, however, have remained high and in some cases grown, with more than three quarters of fund managers in a recent Bank of America survey saying a global recession will likely occur over the next year.
Big Number
46,000. That’s how many employees were laid off in the month of November alone as employers fear recession could be around the corner.
News Peg
In an interview with CNBC’s “Squawk Box” Tuesday morning, JP Morgan Chase CEO Jamie Dimon warned the economy could fall into recession by the middle of next year, as pent-up Americans’ Covid-era savings are expected to run out. Consumer spending, he said, has increased 10% more than last year and 40% more than it was before the pandemic, although he cautioned those gains are being “eroded” by inflation and interest rate hikes that could “derail the economy” and lead to a “mild to hard recession.”
Further Reading
Recession Fears Hit New High Even As Inflation Slows—Here’s What Fund Managers Predict For 2023 (Forbes)
Source: https://www.forbes.com/sites/brianbushard/2022/12/06/inflation-fears-did-not-increase-in-november-first-time-in-more-than-a-year/