Despite experts insisting the economy is improving, consumers bombarded with rising prices seemingly everywhere they turn are much less convinced.
According to Mark Hamrick, Bankrate senior economic analyst, by a number of metrics, the economy is performing "very well."
"The reality is that the U.S. economy right now is the stellar performer around the world. There is no economy that is having the kind of growth and relatively low inflation that our country is enjoying," Hamrick said.
While his remark about "relatively low inflation" might have some cash-strapped consumers shaking their heads, Hamrick acknowledged that it effects everyone differently.
"We have a divide in incomes and wealth in this country where we know that there are all kinds of people who just are really struggling to scrape by. Those who are at the lower bounds of both income and wealth are those that are hurt the most by inflation because they have the least flexibility or the fewer resources to adapt," he explained.
Although experts expect the slowdown in inflation to continue, the pain of high prices won't be going anywhere fast.
"We have yet to be relieved of the burden of high prices, and that is probably not going to realistically materialize," said Hamrick. "We're simply going to continue to make progress as prices sort of level out and the level of price changes are lower than what they were before."
Hamrick said there's a "huge disconnect" when it comes to the way consumers feel about the economy and their spending patterns, the latter of which "really tells us what we need to know about the way the economy is holding up or not."
"Consumer confidence is sort of at about a midway point between where it was before the pandemic and at the lows during the pandemic when we were experiencing historically high inflation, the worst inflation in 40 years," he said. "But there is absolutely a huge disconnect between consumer sentiment and consumer behavior or spending, and spending is quite strong. It's continued to really outpace expectations by a wide margin."
But attitudes may be changing. The University of Michigan's benchmark Consumer Sentiment Index, which measures how optimistic or pessimistic consumers feel about their personal finances and the economy, spiked in March to its highest level in nearly three years. According to the index, consumer sentiment rose to 79.4, the highest since July 2021. Sentiment is currently about 30% above November 2023 and about 6% below its historical average since monthly data collection began in 1978, according to the index.