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Thirty-two percent of American adults—virtually one in every three—expect their financial situations to worsen this year, according to the University of Michigan’s monthly survey of consumer sentiment.
The number is the highest since the university began the poll 75 years ago.
Consumer sentiment drooped to 59.4 this month from 62.8 in February; a year earlier, the outlook was a sunny 84.9.
The only other two times when the outlook was so dark was during the recessions of the 1980s and the first decade of this century, the survey report said.
Americans hold their bleak view despite a labor market that has snapped back from the COVID era three times faster than from the Great Recession, the U.S. GDP has regained its pre-COVID size, and Americans spent record amounts at retail shops and restaurants last month, Bloomberg noted.
However, inflation has cast a cloud over all of that good news.
“Inflation was mentioned throughout the survey, whether the questions referred to personal finances, prospects for the economy, or assessments of buying conditions,” Richard Curtin, chief economist for the university’s surveys, said in a statement detailing the poll’s results.
Survey respondents predicted an average inflation rate of 5.4 percent through the next 12 months, the survey’s highest forecast since 1981’s recession.
“Confidence that economic policies will resolve the problem is essential,” Curtain noted. “Unfortunately, half of all consumers unfavorably assessed current policies, more than three times the 16 percent who rated them favorably.”
TREND FORECAST: Other than the top 10 percent, most Americans, not just one in three, will see their financial situations worsen this year as inflation outpaces wage raises (which averaged a single penny nationwide in February).