17 Mar 2022 - 04:26:00
The American economy isSLOTXOprimarily driven by consumer power. From shoppers pouring big bucks on products from iPhones, cars, sofas, to spending money on experiences like dining out.
But at present, the big problem for the United States is "very high inflation" continues. This makes consumers less confident to spend. This is an issue that worries economists and investors alike. The question is whether inflation will hamper the enormous spending power of Americans in practice.
University of Michigan survey on the shopping mood of American consumers. It conducted a survey of households earning $100,000 or more a year. It found that the first half of February 2022 was the “biggest drop in confidence” in a decade.
That's down to 61.7% as consumers start worrying about how high inflation will affect their funds. It found that about a third of consumers surveyed said inflation was affecting their finances.
"Richard Curtin" chief economist who led the survey team said. This declining consumer confidence is important. because it is a sign of a long-lasting decline in consumer spending. which is worrisome for the US economy. Because consumer spending accounts for 70% of economic activity.
It's not just Richard Martin that's worried that Inflation problems will affect consumer spending power and the country's economy, but there is still "James Bullard" St. Louis Fed chairman. who came out to voice last week that The Fed must act quickly and decisively to control inflation and help consumers spend more. Inflation right now is extremely bad for low- and middle-income families.
Morgan Stanley's chief equity strategist, Michael Wilson, pointed out that lower consumer confidence in spending could pose a risk to the stock market, so it's a big mistake to ignore it.
He believes that the signs that consumers will spend less. It is one of the reasons the stock market correction has not drained right now. University of Michigan polls are more important than widely publicized inflation.