Despite favorable economic indicators like GDP growth and low unemployment, the public’s perception of the economy remains murky. That has compelled experts to look into factors beyond inflation. Employment prospects have improved, and rising incomes outperformed inflation. But many still rate the economy poorly, reflecting what many are calling a “people’s depression” right now.

Looking back at the data in 2022, perhaps the highest since 1991, Americans are forking over 11% of their disposable income on food purchases, according to the USDA. Food reporter for the Wall Street Journal, Jesse Newman, said this is a clear sign of the increasing trend in food spending.

Ben Harris, head of the Brookings Institution’s Economic Studies program, outlined three reasons people may be unhappy with the economy. These reasons are structural problems like economic inequality or excessive pricing and “referred pain,” which is discontent with non-economic factors influencing economic perceptions. The last one is biased news outlets and unfavorable economic coverage.

Even while the economy is generally doing well, signs of stress are rising in individual American homes.

Inflation News and Updates 2024

Inflation has become a substantial political issue ahead of the U.S. elections, complicating the Federal Reserve’s economic stabilization efforts. Voters’ concern over inflation is more significant than that of foreign policies, climate change, taxation, healthcare and crime, just behind immigration and the economy.

As February ended, a Wall Street Journal survey of more than 1,700 registered voters found quite the disapproval of President Joe Biden’s handling of inflation. Even if the growth rate has recently slowed, there is still a general dissatisfaction. That is over the high and unexpected price hikes during and after the pandemic.

Inflation got even worse for advanced countries due to the Russian invasion of Ukraine. This geopolitical conflict made Europe’s cost of retail gases and electricity surge even higher.

The Federal Reserve cautiously cut interest rates to boost the American economy due to high inflation, particularly in the services sector. The U.S. Price Index for Personal Consumption Expenditures (PCE) reported that in the year ending January 2024, prices increased by 2.4%.

Even while PCE inflation dropped from its peak of 7.1% in June 2022, it was still slightly above the Fed’s 2.0% objective. That presented a problem because goods prices dipped 0.5% during that time.

The services sector went through price growth due to service return, wage increases and reduced international competition. As services account for two-thirds of family spending, the central bank must closely monitor its inflationary trends.

With 110 million jobs tied to services, the number of jobs connected to manufacturing (13 million) and construction (8 million) is smaller. With about $16 trillion in output, the service sector is way higher than construction and manufacturing’s single-digit, trillion-dollar outputs.

Despite slowing price increases, the pandemic has left costs higher than pre-2020 projections. If we look at the PCE index, overall prices in January 2024 were around 10% higher than if the previous decade’s trajectory continued its path.

The Struggle for Consumers

American households experienced income gain during the pandemic because of stimulus checks and expanded benefits. However, financial difficulties have popped up as these supports dwindled. Rising expenses for necessities like groceries have risen by about 25% since before the pandemic, increasing reliance on credit cards. Over half of Americans have balances comparable to the Great Recession.

Many Americans are airing out their grievances with the economy. That is because of rising food prices and inflation that always seem to stay, despite food indications like low unemployment and rising incomes. Inflation is expected to slow down, and the Consumer Price Index will drop 2.4% in 2024.

Customers hardly spare any extra money when they eat out, with the 5.1% increase in restaurant prices being the culprit. The increase was a result of the returns to pre-pandemic eating patterns. Groceries also cost a fortune 20% more in 2023 than just two years before.

The restaurant and food industry is confronting raised labor costs, which translates to prices that can only be described as extravagant. Since 22 states already raised minimum wages in January, businesses are under pressure. Company “shrinkflation” is what President Biden called the lowering of sizes, but keeping prices constant — he accused companies of the practice. Speaking of companies, Kellogg’s CEO went under heavy fire for recommending that families eat cereal for dinner.

Financial stress is also a big issue. Even though less than 4% of customers went through credit card hardship, the rise in 2019 hints that consumers are under financial strain, and it’s because of ongoing inflation and rising interest rates. Millions of Americans struggle to make ends meet despite salary gains and economic expansion. Even customers who find household bills “very difficult” have risen significantly. It went from 26.9 million in October 2021 to 43.2 million the following year.

Going into home-buying, first-timers find many cities unaffordable due to rising housing prices and Federal Reserve rate hikes. Half of the principal U.S. cities call for salaries over $100,000. A stunning 99% of U.S. counties have homes that cost an arm and a leg for the average earner, who makes $71,000 a year, according to an ATTOM report. So, not surprisingly, the inability of consumers — many of whom are younger Americans — to reach major life milestones like homeownership frustrates them.

Why Are Companies “Untouched”?

In a recent survey, only 25% of business economists and analysts foresaw a recession. Rather than domestic concerns like interest rate spikes, they expected global problems like tensions with China. They still believe inflation will rise above the Federal Reserve’s 2% objective by 2024.

Business forecasters, despite 70% believing the Fed’s policy is balanced, 21% are worried about high rates. It’s up from 14% in August 2023. A total of 97% believe there is a moderate risk of a Middle East conflict pushing oil prices to cross $90 per barrel, with China and Taiwan being a particular concern.

Respondents express concern about U.S. political instability and support strict budgetary measures to bridge the gap between government spending and tax collection. They look forward to a smooth economic recovery, but new information hints at potential turbulence, so keep your set belts slack for this shaky economic trajectory.

On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.