Inflation Woes Drive Consumer Confidence to 10-Year Low

The University of Michigan released a new survey showing that consumer confidence has dropped to its lowest level in 10 years, falling 8.2% from January, 2022 and a whopping 19.7% from February, 2021.

The report attributes that steeply declining confidence to rising inflation, skepticism of the government’s economic policies and a dire long-term economic outlook.

“The impact of higher inflation on personal finances was spontaneously cited by one-third of all consumers,” said Richard Curtink, the chief economist behind the university’s survey.

James Bullard, President of the St. Louis Federal Reserve, is encouraging the Federal Reserve to take action to mitigate inflation.

“This inflation we’re seeing is very bad for low and moderate-income households,” he told CNBC. “Real wages are declining. People are unhappy. Consumer confidence is declining. This is not a good situation.”

Despite declining consumer confidence, economic growth is expected to remain strong in 2022 with only a slight slowdown from 2021. CNN reported that a growing job market, as well as more cash in the hands of consumers, is propping up an economy that is stronger than many consumers may realize.