You're not the only one noticing the higher prices at the gas pump and in the grocery store. In addition to rising prices, the war in Ukraine is on a constant loop on news channels, providing additional events to worry about -- events that we cannot control. Even those few who were watching the Oscars for entertainment could not get away from violence as Will Smith slapped comedian host Chris Rock in response to a joke. Smith has since apologized, but clearly, bad temper is in the air.
This week, NBC released a poll with over two-thirds of respondents (71%) answering that our country is headed down the wrong track (1,000 adults, March 18-22, +/-3.1 points). Only 22% -- a distinct minority -- believe we are heading on the right track. Disapproval rates for President Joe Biden have increased to 55%, with 42% strongly disapproving. Biden's approval rating now stands at 40%.
When asked what the most important issue facing us is, 21% selected "cost of living," with 16% responding "jobs and the economy." While the Biden White House has attempted to blame Russian President Vladimir Putin for the rise in inflation, the American people are not buying it. When asked about the causes of inflation, 38% cited "President Biden and his policies," 28% said "the COVID-19 pandemic," 23% blamed "corporations increasing prices," and only 6% agreed that "Russia's invasion of Ukraine" is to blame for the increase in prices.
How bad is inflation? According to a March 10 Bureau of Labor Statistics press release, "The all items index rose 7.9 percent for the 12 months ending February. The 12-month increase has been steadily rising and is now the largest since the period ending January 1982. The all items less food and energy index rose 6.4 percent, the largest 12-month change since the period ending August 1982. The energy index rose 25.6 percent over the last year, and the food index increased 7.9 percent, the largest 12-month increase since the period ending July 1981." It is bad -- and the result of Biden's policies regarding energy and continued fiscal stimulus, which has pumped additional money into the economy.
So far, American consumers have been driving the economy, but the question is how long this can continue with inflation running high. This week, Bloomberg published an op-ed by Lisa Abramowicz titled "American Consumers Are Starting to Hit Their Breaking Point," in which Abramowicz lays out her belief that "the longer consumers rein in their spending in response to the highest rates of inflation since the early 1980s, the more difficult it will be to emerge from the recession that seems increasingly inevitable." "We may be about to find out that recessions born out of stagflationary shocks are harder to mitigate," she concluded.
It's not only the increases in energy and food that are squeezing families; there is also an increase in home prices and rent, including "the recent increase in 30-year mortgages rates to 4.5% from about 3% last year," Abramowicz wrote. That increase has resulted in the lowest housing affordability since 2007. With energy, food and housing up, there is not a lot of spare cash for other items. Consumers have begun to decrease their savings rates to pre-pandemic levels -- but this is a temporary salve.
"Retail sales data have been resilient on a nominal basis, supported by inflation that isn't stripped out of the numbers," Abramowicz wrote. "But a look at unit sales of general merchandise goods such as apparel, footwear, toys and sports equipment dropped in nine out of 10 weeks between the end of December and early March on a year-over-year basis" while "43% of consumers recently surveyed said they would delay less-important purchases if prices kept going up."
What can you and I do about all this? Well, not much other than worry, which rarely leads to anywhere good. What we can do is make our lives and the lives of those around us better. We can work together to improve communities through volunteering. We can go outside and get sunlight, improving our mood. (And hopefully, our good mood will rub off on those around us -- or at least allow us to forgive an ill-advised joke.)
We can strength train for at least an hour a week. A recent study published in the British Journal of Sports Medicine concluded that strength training can lead to a 20% lower risk of mortality from noncommunicable diseases.
My point is not for you to give up on the right path forward but to blaze your own.
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