Why U.S. Consumers Feel So Broke

CNBC

While a recession hasn’t technically been declared in the U.S., roughly 3 out of 5 Americans believe it is. Consumer confidence in the economy has averaged nearly 28 points lower during President Biden’s term compared to former President Trump’s time in office. So why does the U.S. economy feel so awful for the average consumer despite all the positive data? “I think that the economy is really top of mind for people,” said Joanne W. Hsu, the director of the Surveys of Consumers at the University of Michigan. “We are in a very strange situation where people don’t feel like they’re thriving in spite of many strong indicators in the economy.” The Biden administration has presided over the highest inflation in 40 years, hitting a four-decade peak of 9.1% in June 2022. While declining since then, stubborn inflation has eaten into American consumers’ purchasing power. In May 2024, the Heritage Foundation estimated that the average, inflation-adjusted, weekly paycheck shrunk by about 4.4%,,or $50, during President Joe Biden’s term. That’s despite the fact that wages have risen faster under Biden than under former President Donald Trump’s administration, according to calculation by Bankrate. “When you have buying power that’s been eroded, what in the past might have seemed like a necessity is all of a sudden at risk,” said Mark Hamrick, a senior economic analyst from Bankrate. “It feels recession-like to many.” Watch the video above to see why the U.S. is experiencing recession-like symptoms. Chapters: 1:27 Trump’s advantage 3:52 Bidenomics 7:24 Inflation Produced by: Juhohn Lee Edited by: Nora Rappaport Animation: Christina Locopo Supervising Producer: Lindsey Jacobson Additional Footage: Getty Images » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Want to be more successful and confident with your money? Take CNBC Make It’s new online course. Our expert instructors will help you master your money and discover practical strategies to boost your savings, reduce debt, and grow your wealth—in a way that works best for you. Enroll in "Achieve Financial Wellness: Be Happier, Wealthier & More Financially Secure" to start your journey to financial freedom today! Get a 30% discount with the coupon code EARLYBIRD until September 2, 2024: https://cnb.cx/3WiasGB Connect with CNBC News Online Get the latest news: https://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC on Threads: https://cnb.cx/threads Follow CNBC News on X: https://cnb.cx/FollowCNBC Follow CNBC on WhatsApp: https://cnb.cx/WhatsAppCNBC #CNBC #Recession #Economy #Inflation Why U.S. Consumers Feel So Broke