Here’s how declining consumer confidence affects the economy.
A May survey from the National Opinion Research Center found that, in general, Americans are deeply pessimistic about the current U.S. economy and that the nation is divided on some of the basic values we hold.
For instance, the survey found that Americans are registering their highest level of economic dissatisfaction in years, including doubts about America’s political system, role as a global leader, and ability to help people achieve the American dream. Of all respondents, 27% said they have a good chance of improving their living standards— a 20 point drop from 2021.
This shows that consumer confidence is on the decline, and when confidence declines, so does spending. That can have a massive impact on the real estate market and the economy. However, there is also good news. Three of the key supply-side factors driving today’s global inflation levels have already turned around, meaning that relief could be on the horizon for shoppers worldwide:
- A bellwether semiconductor price is now half its July 2018 peak, a 14% decrease from the middle of last year
- The spot rate cost for shipping containers has declined 26% since its all-time high in September 2021
- North America’s fertilizer prices are 24% below their record high in March
These three factors might be an indication of what’s happening with the short- and medium-term inflation rate, which will help with economic growth when inflation declines a little.
If you have any questions about what’s going on in today’s economy and real estate market, don’t hesitate to give us a call or send us an email. Hope to hear from you soon!