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Consumers feel the pinch as inflation, omicron drag on

Amanda Peacher Jan 28, 2022
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Though the economic recovery is going strong, inflation is taking a toll on consumer sentiment. Robyn Beck/AFP via Getty Images

Consumers feel the pinch as inflation, omicron drag on

Amanda Peacher Jan 28, 2022
Heard on:
Though the economic recovery is going strong, inflation is taking a toll on consumer sentiment. Robyn Beck/AFP via Getty Images
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Some metrics used to take the pulse of this economy are showing pretty significant signs of improvement. The latest, Thursday’s gross domestic product, showed that economic growth was strong in 2021 — among the strongest in decades. 

But consumers are not feeling it. According to the latest University of Michigan survey, consumer sentiment sank to its lowest point in more than a decade. There are a few reasons why, with omicron and inflation among them. 

If there’s one thing for certain we can say about the economic recovery and how Americans feel, it’s that it’s complicated.

“There’s definitely a sign among the American public that there’s a growing pessimism about the economy,” said Mallory Newall, a vice president at the polling firm Ipsos. “Inflation continues to go up. People are definitely feeling that pocketbook squeeze.”

Like Alyssa Grovemiller, who works with alumni at Ohio State University in Columbus. She said it’s almost like the price of food goes up in between every visit to the grocery store. 

“I feel like everything is more expensive: milk, cheese. Things you buy normally are just, the prices are going up.”

Still, Grovemiller said she’s financially stable and managing OK. But that’s not necessarily the case for low-income workers, according to Jeff Jones, a senior editor with Gallup.  

“One in five lower-income Americans say that higher prices are creating a severe financial hardship for them,” he said.

There’s also omicron, which caused many people who earn less than $50,000 a year to miss work recently, according to John Leer with Morning Consult. 

“You’ve got a lot of primarily lower-income adults who are being hit on a couple different fronts,” Leer said.

That’s probably why consumer sentiment dipped so much in just the past couple of weeks. Leer said it’s a contrast to some of the rosier, end-of-year 2021 numbers.

“A lot of people right now are looking at data from December, and they’re saying, ‘That wasn’t that bad.'” But he added that January is already a different story. 

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