Consumer sentiment in the U.S. dropped to an eight-month low in July, according to the Consumer Sentiment Index from the University of Michigan.
While the U.S. technically isn’t in a recession, a survey by Affirm found that roughly 3 out of 5 Americans believe it is. In a 2024 poll, Gallup found that one-third of Americans mentioned economic issues as the nation’s most important problem.
“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.