Americans still not feeling better about economy: USA Today

NEW YORK, Aug. 12 (Xinhua) -- Although a pandemic-induced price spike has slowed substantially, Americans remain preoccupied by the cumulative rise in costs they've faced since the start of the health crisis, especially for essentials such as food and gas, USA Today reported on Monday.

"And fresh data reveal that shoppers have become more price sensitive recently even as inflation has cooled, at least partly because their COVID-era savings have dwindled," the report noted.

"The mere fact that (prices) are not going up anymore is not appeasing consumers," especially the low- and middle-income people who have felt the brunt of rising costs, Scott Hoyt, an economist at Moody's Analytics, was quoted as saying. "They want to see them drop, but that's not happening."

People's views of inflation matter because they could affect their spending, which makes up 70 percent of economic activity and has slowed but remained sturdy so far, said the report.

Annual inflation has eased from a 40-year high of 9.1 percent in mid-2022 to 3 percent in June, according to the Labor Department's consumer price index. The July CPI report, due out Wednesday, is expected to show overall inflation held steady at 3 percent in July but a core measure that excludes volatile food and energy items dipped to 3.2 percent from 3.3 percent, according to the report.

"Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates," Dana Peterson, chief economist of the Conference Board, said of the group's July survey.

"Americans do have more spending power. But they're not necessarily feeling it," the newspaper noted.

What is concerning consumers is the change in prices over the past few years, according to Hoyt.