From The New York Times:
Americans are unhappy about the economy. They report less confidence in it than they did at the start of the Covid pandemic, when the unemployment rate was four times as high as it is now. Their feelings toward the economy are almost as low as they were during the depths of the Great Recession in 2008.
How is this possible, given that the unemployment rate is low and the economy has rapidly grown over the past two years? The culprit is what Americans describe as one of the most important problems today: high inflation.
Inflation stands out from other problems because it is so inescapable. Unlike unemployment, it affects everyone. And people encounter it every day — when they go to the grocery store, drive by a gas station or buy almost anything.
Inflation also contributes to a sense of powerlessness. Rising prices feel like something done to people rather than a problem they brought on themselves. Short of cutting their spending, individuals cannot do much about inflation.
And after decades of stagnant wages and salaries, inflation is yet another example of Americans’ livelihoods failing to keep up with the cost of living.
“People are so raw at this point, having lived through two years of Covid, that any new thing is going to make them upset and angry,” said George Loewenstein, a behavioral economist at Carnegie Mellon University. “It just feels like it’s one thing after another.”
The problem is not getting much better. The government reported yesterday that prices rose 8.3 percent over the 12 months ending in April. High inflation has not persisted like this since four decades ago — at a time when Ronald Reagan was president, only two Star Wars movies had hit theaters and the internet did not exist.