Consumers Disliked 2021’s Economy More Than 2020’s

American consumers rated the economy of 2021 lower than the economy of 2020, according to an important annual Federal Reserve survey released Monday.

The Survey of Household Economics and Decisionmaking showed that 24% of respondents thought national economic conditions were good or excellent. According to CNBC, the figure marks a significant decrease from 50% in 2019 — as well as a slight decrease from 26% in 2020.

Although the unemployment rate skyrocketed from 3.5% to 14.7% between February 2020 and April 2020, lawmakers responded to COVID-19 and the lockdown-induced recession with an unprecedented level of federal aid. After unemployment rates largely recovered, inflation began to skyrocket beyond the Fed’s typical 2% benchmark — from 1.3% in December 2020 to 7.0% in December 2021. 

According to the Fed’s survey, “the majority of parents received additional income in 2021 through the monthly Child Tax Credit.” While most higher-income parents saved the extra money, most lower-income parents spent it on “housing, items for their children, or food.” Indeed, inflation tends to fall most heavily upon poor families, which tend to devote a greater share of their budgets toward necessities.

The rise in prices since the beginning of 2021 has outpaced nominal increases in pay, producing a nearly 3% decline in real wages — stretching Americans’ budgets with respect to food, gas, housing, and other staples. A recent poll found that 94% of Americans were either “upset” or “concerned” about the impact of skyrocketing inflation, while a slim 28% approved of President Joe Biden’s approach toward managing price levels.

To curb rising price levels, the Fed increased interest rates by a half point earlier this month — which marked the largest rate hike since May 2000 and followed a quarter point increase from near-zero levels two months ago.

“Inflation is much too high,” Fed Chairman Jerome Powell said at a

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