The broad optimism that Americans felt about the economy in the spring of 2021 — optimism that even a global pandemic and hundreds of thousands of COVID deaths couldn't squelch — has finally been undone by inflation, and health worries that are getting worse rather than better.
Why it matters: The sharp rise in food and energy prices over the past year has had a particularly harsh effect on the finances of suburban and rural Americans.
Driving the news: Every six months, McKinsey and Ipsos conduct a massive survey of Americans, asking about their perceptions of the current state of the economy. This time around, sentiment has fallen sharply.
By the numbers: For the first time since the survey began last year, Americans have a negative outlook on the economy. The overall index fell to 99 (a "negative outlook") this spring from 103 (a "positive outlook") a year ago.
City-dwelling Americans remained optimistic overall, with their score falling modestly from 112 to 109.
In the suburbs, pessimism started to bite more seriously, with the score falling from 103 last fall to 96 this spring.
Rural areas seem to be faring the worst. The index shows the score for rural Americans at a shocking 85, down from an already-weak 95 a year ago.
Between the lines: Overall inflation is bad, with prices rising 8.3% over the past year. Food and energy prices, however, have shot up much more quickly than that, up 17.4% in April from a year previously. Gasoline prices alone were up 43.6%.
Inflation therefore hits hardest where Americans have large families with more mouths to feed, and in places where everything is a drive away and there is no public transit.
A child free city-dwelling couple who has locked in a low mortgage rate and doesn't own a car will experience inflation very differently than a rural family of five struggling with gas bills, heating bills, and supermarket sticker shock.
Meanwhile: Urban Americans' biggest concerns are health-related.Among younger workers, 64% of 25-34 year-olds said that physical health issues were impacting their ability to effectively to their jobs, and 67% said the same thing of mental health issues.
Those numbers are up 7 points and 8 points, respectively, in just a single year.
The bottom line: Americans are not feeling OK. That's unusual.