Why are consumers pessimistic about the economy while inflation is cooling?

Published On Oct 31, 2024, 6:29 PM

Despite a decrease in inflation rates, American consumers remain pessimistic about the economy. Inflation peaked at 9.1% in mid-2022 but has since fallen to 2.4% as of September 2024. Two years of high inflation has affected consumers' perceptions, as they continue to feel that everyday prices are significantly higher than they were a few years ago, contributing to a negative sentiment towards the economy. Experts suggest that the memories of recent economic challenges, high interest rates, and ongoing uncertainty surrounding electoral politics contribute to this pessimism.