Inflation in the US Is Improving, But The Public Mood Is Still Sour

• Despite a relatively steady inflation rate and a recent halt in price increases between September and October, the overall cost of goods and services in the U.S. remains higher than pre-pandemic levels. Gasoline prices have dropped, and food prices have plateaued, but the public perception is that prices remain elevated.
• Joe Biden's approval ratings have declined, reaching a disapproval rate of 56%, primarily due to the persistent inflationary environment. The Federal Reserve has also faced criticism, with a record 25% of respondents giving it a "poor" performance rating in a September Gallup poll.
• Despite inflation-adjusted incomes being 6% higher than pre-pandemic levels, surveys indicate a prevailing scepticism about the future. While inflation expectations have slightly decreased, they remain above the central bank's target. The public mood has shifted from general optimism before the pandemic to persistent pessimism amid rising inflation.
• The challenge for both President Biden and the Federal Reserve lies in changing public perception. The public's memory of economic challenges is slow to recede, and even positive economic indicators may not immediately shift attitudes.
• Further, if economic data continues to show a slowdown in inflation and weaker job growth, there might be an opportunity for both entities to focus on sustaining the job market and improving real incomes to regain public trust.

(Source: Reuters)