Americans' Economic Outlook Rapidly Improving, Consumer Survey Finds

Americans' outlook of the economy sharply improved over the last two months.

For Context: In the final months of 2023, outlets across the spectrum sought to understand why Americans’ view of the economy was out of sync with traditional economic indicators. Despite strong output and weakening inflation, many Americans were pessimistic about the state of the economy. Outlets attributed this disconnect to a number of factors– political angst, high gas prices, and still-high prices on goods. In the few months since outlets set out to quantify the economic pessimism, some have changed their outlook.

Details: According to a new report from the University of Michigan Consumer Sentiment Index, consumer sentiment rose 29% over the past two months, marking the largest two-month increase since 1991.

Key Quote: Surveys Director Joanne Hsu said, “For the second straight month, all five index components rose … Like December, there was a broad consensus of improved sentiment across age, income, education, and geography. Democrats and Republicans alike showed their most favorable readings since summer of 2021.”

How the Media Covered It: Axios (Lean Left bias) attributed the increase to a decline in gas prices and a rise in stock prices. The Washington Examiner (Lean Right bias) credited the efforts of the Federal Reserve, stating the data shows “just how far the Fed has come in its inflation fight.” The Wall Street Journal (Center bias) stating that “recession fears for 2024 are fading.”