As inflation soars, Americans' confidence in the economy is crumbling: poll
Americans think the economy will deteriorate in coming months
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Americans are quickly losing confidence in the U.S. economy, according to a new survey published this week, reflecting heightened concerns among consumers about sky-high inflation and the rising price of everyday goods.
A Gallup survey published Wednesday shows Americans have low levels of confidence in the economy, with 42% rating the current economic conditions as "poor" and 38% describing it as "fair." By comparison, 2% of respondents said the economy is "excellent" and only 18% described it as "good," according to the poll, conducted between April 1-19.
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What's more, most Americans expect the economy to deteriorate further: About 76% said they think the economy is getting worse, compared to 20% who believe it is improving.
"Economic confidence remains sharply low but still well above readings during the Great Recession," the survey said. "However, if inflation continues to rise and gas prices remain elevated heading into the summer months, economic confidence in the U.S. may well fall further."
Gasoline prices hover around $4 per gallon for the least expensive grade at several gas stations April 11, 2022, in Washington, D.C. (Chip Somodevilla/Getty Images / Getty Images)
Four in 10 Americans have identified economic issues as the biggest problem facing the U.S. — the highest level in six years — including 17% who think the most concerning issue is the high cost of living. Another 6% said fuel prices are the biggest problem.
Those figures are up slightly from last month, when 35% of Americans said the economy is the biggest problem.
There is a partisan divide in the data. Republicans are more likely than Democrats to cite economic issues, and inflation specifically, as the country's top problem. About 42% of respondents who identify as Republicans said the economy is the No. 1 problem, compared to 33% of Democrats.
The poll comes shortly after the government reported that consumer prices soared 8.5% in March from the previous year, the fastest pace since 1981. Key staples have skyrocketed in price over the past year, including food (8.8%), gasoline (48%), electricity (13.5%) and rent (5.1%).
A gasoline truck leaves the Marathon Oil Refinery after it was loaded with fuel in Salt Lake City, Utah, Oct. 29, 2021. (George Frey/AFP via Getty Images) / Getty Images)
The inflation spike has been bad news for President Biden, who has seen his approval rating plunge as consumer prices rise. The White House has blamed the price spikes on the Russian war in Ukraine, supply chain bottlenecks and other pandemic-induced disruptions in the economy, while Republicans have pinned it on the president's massive spending agenda.
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The Federal Reserve is now taking an increasingly hawkish approach to fighting inflation. Policymakers raised rates by a quarter-percentage point in March and have since confirmed that sharper, half-point increases are likely in the coming months, beginning in May.
People shop for groceries at a supermarket in Glendale, Calif., Jan. 12, 2022. (Robyn Beck/AFP via Getty Images) / Getty Images)
"It is appropriate to be moving a little more quickly," Fed Chairman Jerome Powell said last week during a panel discussion at the International Monetary Fund and World Bank spring meetings. "I also think there’s something in the idea of front end-loading whatever accommodation one thinks is appropriate. So that points in the direction of 50-basis points being on the table."