Washington D.C — A recent survey done by the University of Michigan’s monthly consumer sentiment shows Americans’ dissatisfaction with the economy due to gas prices, mortgage rates, and inflation. Americans’ view of the economy is even worse than during either the COVID-19 pandemic or the 2008 financial crisis. With high gas prices and affordability concerns, consumers are growing even more uneasy with the state of the economy.
Americans’ concerns will linger as gas prices remain unsteady and life continues to get more expensive. Families are already nervous about the state of the economy, and with inflation rates at risk of trending upwards, this may lead to unwanted impacts such as pushing up housing prices and everyday goods continuing to increase in price.
NBC News: Gas prices, mortgage rates and inflation push Americans’ view of the economy to near record lows
Key Points:
- The University of Michigan’s monthly consumer sentiment survey, released Friday, showed that headline sentiment in September fell to its second-lowest reading in the survey’s 74-year history, meaning Americans today feel worse about the economy than they did during either the COVID-19 pandemic or the 2008 Financial Crisis.
- The only month lower than September was May’s record low. That month, U.S. gas prices peaked at $4.56 a gallon.
- Now, that same pressure from soaring gas prices is playing out once again, as oil prices rebound and affordability concerns reach a fever pitch. As of Friday, the average price of a gallon of gas was $4.49, just a few cents off its May high.
- In recent months, tariffs have become a renewed focus for both consumers and the Trump administration, which imposed 50% tariffs on about $20 billion worth of Canadian goods in August.
- Still, the uncertainty surrounding trade, coupled with ongoing geopolitical tensions, is adding to broader concerns about where prices — and the economy — go from here.
- According to the Michigan survey, “views of current and year-ahead expected personal finances both weakened about 10% this month, with concerns over high prices continuing to climb.”
- Gas prices are now among the highest since the Iran war began. In California, prices are now averaging more than $6 a gallon.
- One of the main drivers behind the surge in gas prices is the shutdown of the critical Strait of Hormuz, a waterway along Iran’s southern coast that previously carried about 20% of the world’s oil supply.
- But the concern isn’t just prices at the pump. Diesel prices are also hovering near record levels.
- Often described as the lifeblood of the U.S. economy, diesel powers everything from trains and ships to the tractors farmers use to harvest food. When diesel prices rise, costs tend to increase throughout supply chains — expenses that can eventually be passed on to consumers.
- Persistent inflation fears are also putting more pressure on the Federal Reserve to keep raising interest rates after the central bank hiked rates by 0.25% at its meeting last week.
- On Friday, the yield on the 10-year Treasury note hit a fresh 19-year high of 5.23%. That matters for consumers because the 10-year Treasury heavily influences long-term borrowing costs, particularly mortgage rates. On Thursday, the average rate on a 30-year fixed mortgage jumped to 7.37%, its highest level since May 2024.
- But it’s not just about consumer affordability. Higher yields can also weigh on economic growth by making it more expensive for businesses to borrow, invest and refinance existing debt. Over time, that can spill into the labor market.
- “U.S. firms aren’t doing many layoffs this fall. High gas and diesel prices haven’t triggered more layoffs,” wrote Long. But she warned that higher borrowing costs could become a problem heading into next year.
To learn more about the campaign, visit UnrigOurEconomy.com or contact press@unrigoureconomy.com
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About Unrig Our Economy
Unrig Our Economy is a national campaign to fix the rules of our economy to make it work for working people. We know that when the middle class does well, all of us do well — which is why we’re fighting on behalf of working Americans and holding corporations, their wealthy executives, and the politicians who enable them accountable.