Consumer Economic Expectations Drop to Lowest Level in 12 Years, Triggering Recession Warning

Consumer Economic Expectations Drop to Lowest Level in 12 Years, Triggering Recession Warning

According to the latest survey, consumer expectations regarding the short-term economic situation have fallen to the lowest level in the past 12 years. Amid rising inflation and instability in financial markets, many Americans are expressing pessimism about future economic prospects. Economists are beginning to sound the alarm, citing this decline as a potential precursor to recession.

In a survey conducted by a major financial institution, it was revealed that only 10% of respondents believe in sustained economic growth over the next six months. This is the lowest level since the global economic crisis of 2008. Such widespread pessimism could lead to a reduction in consumer spending, which in turn would negatively impact economic activity in the country.

Experts identify several factors contributing to the deterioration of sentiment among consumers. Firstly, the ongoing rise in prices for essential goods and services causes concern among households already feeling the pressure from high housing and food costs. Secondly, instability in financial markets, triggered by rising interest rates, raises fears about future investments and economic growth.

Some economists predict that if such trends continue, it could lead to a downward spiral in the economy, as consumer spending accounts for more than two-thirds of the US gross domestic product (GDP). A lack of confidence in the future could hinder both personal and corporate spending, ultimately slowing economic growth.

In light of the current situation, analysts are urging the government and the central bank to take measures aimed at restoring consumer confidence. Temporary solutions that could be implemented include lowering mortgage rates and combating inflation, which experts believe could help improve the economic situation and restore optimism among consumers.

Thus, the decreased expectations of Americans raise concerns among policymakers and economists, as this could signal a potential recession if the situation does not improve.

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