Consumer Sentiment Plummets for Third Consecutive Month as Inflation Bites Deeper
American wallets are screaming - and the numbers don't lie. For 90 straight days, consumer confidence has been in freefall as stubborn price pressures crush household budgets.
The Inflation Squeeze
Grocery bills cutting deeper. Gas pumps draining bank accounts. Rent hikes pushing families to the brink. This isn't temporary discomfort - it's systemic financial erosion that's rewriting spending habits nationwide.
Psychological Tipping Point
Three months of consecutive declines signal something darker than seasonal adjustment. We're witnessing a fundamental shift in economic perception where consumers aren't just worried - they're defeated.
The Fed's Delicate Dance
Meanwhile, central bankers keep performing their favorite magic trick: declaring victory over inflation while real people keep losing actual money. Because nothing says 'economic recovery' like choosing between prescriptions and protein.
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“Consumers continue to express frustration over the persistence of high prices, with 44% spontaneously mentioning that high prices are eroding their personal finances, the highest reading in a year,” said Surveys of Consumers Director Joanne Hsu.
Inflation Expectations Remain Elevated
Personal Consumption Expenditures (PCE), which tracks the prices of a wide range of goods and services purchased by U.S. households and is the Fed’s preferred gauge of inflation, ROSE by 2.7% year-over-year in August. However, consumers expect higher inflation to return, with a year-ahead estimate of 4.7% and a long-term estimate of 3.7%.
Consumers remain worried about the risk of persistent inflation and a weakening labor market. One interesting finding from the survey is that sentiment from participants with large stock holdings remained unchanged on a monthly basis, while sentiment among those with little or no stock holdings dropped.
