The Economic Confidence Index (ECI) is now down to -33, which is equal to what it was in April 2020 when COVID lockdowns were in full force.
The number is the worst since the Great Recession, when it reached -72 in 2008.
Inflation is the main reason why confidence has fallen in recent months. Prices are on track to be up about 12% in 2021, and there is no end in sight to the rising prices.
High inflation has many negative effects on the economy, including real wage decreases, interest rate hikes that lead to higher unemployment, and a loss in buying power for those on fixed incomes that effectively equals a decrease in income.
67% in the poll said the economy was getting worse, and they may very well be right. Optimism about things getting better has waned in the last six months, and it’s not much of a stretch to think that they will probably get worse before they get better.
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