The Biden economy faces a decline
In an ABC News-Washington Post poll, 70% of Americans negatively rated the economy. Falling in November, consumer sentiment stands at a 10-year low, unseen even during the top of the Covid-19 crisis.
However, Americans are still shopping, with retail sales rising in October at the fastest pace since March after the release of stimulus checks. Walmart, Home Depot, and Target are booming.
Hiring seems stronger than the government estimated while workers are quitting their jobs at a record speed, primarily because they are sure they can find a better job. Besides that, there is high inflation. In the U.S. gas prices stand at a seven-year high while food prices are also rising. New car prices rose in October, marked as the most since the beginning of 1975.
Overall, the cost of living is rising, and Americans do not seem comfortable about it. Inflation is shading bright points on the economy.
Chief economist at PNC, Gus Faucher, said that the economic news seems good in general. However, inflation is rising every day. He added that some of the most noticeable costs are increasing, making it appear as if the inflation problem is worse than it actually is.
The Positive Side
The overall good news is that Americans are still shopping despite the supply chain crisis and high inflation. That seems crucial because consumer spending represents around two-thirds of the US economy. In October, the retail sales report indicated that the US economy started the holiday shopping season with serious momentum, beating expectations.
Chief economist at Jefferies, Aneta Markowska, said that people do not feel great about the economy but still spend money shopping. She added that she could not entirely believe what the confidence reports indicate.
Eventually, if Americans continue spending, it will turn out that this confidence issue is more of a political problem for the President than an economic one.
Representation of confidence: Workers quitting jobs
It’s important to mention that everybody and everything experiences different things in today’s economy. For example, some parts of the economy are still struggling to recover from the hit by the pandemic. One example is the travel industry.
Inflation primarily affected people living on a fixed salary and low-income families.
Still, there is more evidence that the overall jobs market proceeds to recover from the current pandemic. In October, the hiring decreased the unemployment rate to 4.7%, down from approximately 16% at the beginning of 2020. In September, around 4.5 million Americans quit their jobs, which shows how much support workers have in the modern economy.