On Nov. 8, the Federal Reserve Bank of New York released its Survey of Consumer Expectations.
It shows economic anxiety over inflation, the labor market, and household finances. According to the survey, respondents are most on edge about inflation. For instance, “median inflation expectations increased by 0.4 percentage point to 5.7% at the one-year horizon, reaching a new series high.”
Short-term inflation expectations also increased for the 12th consecutive month. As did median inflation uncertainty over the short- and medium-term horizons. “Expectations about year-ahead price changes for all the commodities … increased in October.” The public is especially anxious over the rapid price rises in gas, food, housing, rent, and college.
For months, inflation has become a persistent problem. A report from Moody’s Analytics reveals the average U.S. household is forking over an extra $175 per month in food, fuel, and housing costs. The Biden administration has repeatedly said that the inflation problem is transitory. Real-world data say otherwise.
The public is also troubled by what they see happening in the labor market. For example, 35.5% of respondents believe the unemployment rate will be higher next year. Eleven percent of those with a job think they will lose their position within the next year.
Pessimism abounds on the home finances front. “Perceptions of credit access compared to a year ago deteriorated.” What’s more, 11.2% fear they will not be able to meet minimum debt payments over the next three months.
With the holidays approaching, this is not welcome news. This month, we may face the most expensive Thanksgiving ever. Christmas will also wallop our wallets. The prices of Christmas foodstuffs and presents — those available on store shelves, not sitting on container ships — are on pace to break records.
Unfortunately, Biden appears to have no plan. Last week, when pressed about the skyrocketing cost of gasoline, Energy Secretary Jennifer Granholm literally laughed when asked if the administration would even consider increasing domestic energy production.
Keep in mind, the day before Biden entered the Oval Office, America was energy independent. Yet, under Biden’s misguided environmental policies, we’ve resorted to begging OPEC to pump more oil. It’s the tip of the iceberg. In 11 long months, we’ve witnessed record-setting inflation, stagnant economic growth, lackluster job reports, and a plethora of small-business regulations.
All of these policies, coupled with trillions in new federal spending, have put a once-robust V-shaped, post-pandemic economic recovery on life support. Democrats suffered embarrassing losses in recent state elections. But they haven’t gotten the message. Their bloated $1.2 trillion pseudo-infrastructure bill will make inflation worse, not better.
Now, we wait and see what happens with Biden’s poorly named Build Back Better bill. If the economy were a person, it would be holding its breath.
Chris Talgo ([email protected]) is senior editor at the Heartland Institute.
