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October 6, 2008 10:55:50 PM CDT

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Consumer Mood More Downbeat Than Economy

Posted Jun 18, 08 3:17 PM CDT in US,  Business 

(Newser) – The economy, statistically speaking, is sluggish, but hardly Great Depression-like—though American consumers seem to disagree, the Washington Post reports. They're paying more for everything from gasoline to grapefruit, are watching the value of their homes decline and fear their jobs may be disappearing—which, policy-makers worry, could breed behaviors that will make all the doom and gloom come true.

After two decades of prosperity, Americans have come to expect low unemployment and inflation as the norms. In May 1980, unemployment was at 7.5% and inflation at 14.4%; they’re 5.5% and 4.2% today. But skyrocketing gas and food prices, plus falling home values, affect the vast majority of Americans, so the perception of trouble can be a few shades darker than reality.

Source Washington Post

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A foreclosure sign stands outside an existing home on the market in Denver.   (AP Photo)
Delbert Pighee protests high gas prices, Tuesday, in Cleveland. The national average for a gallon of regular gasoline hovered at $4.078   (AP Photo/Tony Dejak)
Wholesale prices bolted ahead in May at the fastest pace in six months as energy and food costs marched higher. Prices for fruits and melons rose 5.9 percent, the most since December.   (AP Photo/ Donna McWilliam)
"Things that you buy more frequently and that have large percentage increases will weigh more in people's perception of inflation," one economist says, with ever-increasing gas prices a key example.   (AP Photo)
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