International Forecaster Weekly

AMERICANS ARE THREE TIMES MORE LIKELY TO MEASURE HOW ECONOMY IS DOING BASED ON INFLATION THAN UNEMPLOYMENT

A new poll is the latest sign that job numbers are pretty strong and the stock market may be at an all-time high. 

Yet, Americans are overwhelmingly grading the economy by the price they see on the shelves.

Prices paid haven't always been the top indicator of choice. When YouGov asked the question in August 2020, 44% picked the unemployment rate compared to 25% who chose inflation.

Bottom line, in the latest Economist/You Gov poll, a majority of Americans (53%) say the economy is getting worse — one point lower than the highest level of the Biden presidency, last month.

Guest Writer | December 15, 2021

By Dave Allen for Discount Gold & Silver

A new poll is the latest sign that job numbers are pretty strong and the stock market may be at an all-time high. 

Yet, Americans are overwhelmingly grading the economy by the price they see on the shelves.

Prices paid haven't always been the top indicator of choice. When YouGov asked the question in August 2020, 44% picked the unemployment rate compared to 25% who chose inflation.

Bottom line, in the latest Economist/You Gov poll, a majority of Americans (53%) say the economy is getting worse — one point lower than the highest level of the Biden presidency, last month.

Inflation appears to be driving the high level of economic anxiety. While 27% of Americans today describe unemployment as a very serious national problem, that’s down by about half from January.

Now, about twice as many Americans say inflation is a “very serious” national problem. It's amazing what you'll find when you manage expectations.

The poll was conducted days before last Friday’s jobs report showing inflation growing at its fastest rate in nearly four decades. 

It's a party thing, too. Republicans are far more likely than Democrats to say inflation is a very serious national problem. 

There is little difference of opinion by family income level: 56% of people in each income level see inflation as a very serious national problem.

However, people at lower family income levels are more likely to say they feel its impact

For example, two-thirds of Americans with annual family incomes under $50,000 report difficulty in affording food, compared to a third of those with incomes above $100,000. 

The less well-off have been more likely to have cut back in general. Besides inflation, there’s another major threat to the country’s economic well-being: supply-chain problems. 

More than three in five Americans (61%) say they’ve gone shopping for something this year and discovered that stores had run out. Similar proportions of people have reported shortages in both major political parties and in all regions of the country. 

However, a slightly higher share has reported shortages in the South and Midwest than on the coasts, and in rural areas compared to cities. 

What have stores run out of? Given the space to type their own answers, many respondents name food or specific food items, like milk, eggs, meat, Greek yogurt, and petfood. 

And don’t let cleaning products and toys off that list. One of the most common missing store items is one that often goes missing in supply crunches: 

Nearly 50 different people in this poll named toilet paper as the commodity their store ran out of. 

Joblessness has waned as a source of economic concern. The government’s official (but undercounted) U-3 unemployment rate continues to decline. 

But worries about the state of the economy persist. For some Americans, it may simply be that they don’t believe the official jobless numbers. 

A majority (53%) believe there are more people out of work than the official figures suggest, and the people who say that (67%) are especially likely to say the economy is worsening.

Child Tax Credit Checks at Risk

At risk are the monthly checks that have propped up millions of families since earlier this year — and the businesses where they spend it.

The child tax credit payment that hits bank accounts on Wednesday will be the last — unless Congress pushes through an extension.

The expiration would hit families hard that have relied on the cash. The money contributed to the financial cushion — built (at least in part) by various government stimulus —that’s fueled historic consumer demand.

UBS economist Andrew Dubinsky believes, "We're talking about a decent chunk of personal income here — and it's really the last transfer to households from the last stimulus bill."

Since July, almost 40 million eligible families have received $300 payments for each child up to age 5 and $250 per kid aged 6-17.

The impact was nearly immediate. Before the first payment, 11% of households with kids reported not having enough to eat. 

Right after the payments started to hit, 8.4% (or about one-quarter less) said the same — among the steepest weekly drops since the pandemic hit.

Big retailers called out the boost. Now investors want to know what to expect if it vanishes.

Joe Feldman, a retail analyst at Telsey Advisory, pointed out, "There is some concern, from a sales standpoint, how January might turn out for a lot of the retailers," 

If the government lets the payments lapse, more states may step in to send cash to eligible families — or maybe they won’t.