Inflation makes its mark on metro Atlantans' bank accounts
Metro Atlantans are still optimistic about the economy — less so than last year — and more likely to say they’re spending more on groceries, health care, rent and other bills.
- They’re spending less, however, on entertainment and dining out.
Driving the news: Every six months, McKinsey and Ipsos conduct a massive survey of Americans, asking about their perceptions of the economy.
- This time around, sentiment across nearly all metropolitan regions has fallen sharply.
The big picture: The broad optimism that Americans felt about the economy in the spring of 2021 has finally been undone by inflation and health worries that are getting worse, Axios’ Felix Salmon writes.
By the numbers: Metro Atlanta’s economic optimism ranked 105 on a 0-200 scale — that’s eight points lower than the national average and six points lower than it was a year ago, McKinsey/Ipsos say.
- Roughly half of the respondents said they were spending more on groceries and utilities, and about a third said their housing and health care costs had gone up.
- Just under half of the respondents reported being able to cover their household expenses if they or someone in their household lost their job.
- Roughly one-third of respondents said access to transportation, mental and physical health issues, “an inability to share your full self at work” and a hostile work environment were affecting their ability to perform on the job.
Zoom out: For the first time since the survey began last year, Salmon writes, 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.
- In rural areas, the economic optimism index ranks around 85, down from an already-weak 95 a year ago.
Between the lines: Overall inflation is bad, Salmon writes, 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%.
What they're saying: Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, said the economy remains strong enough for policymakers to try to tamp down inflation — carefully.
- "Remember this," Bostic wrote this week. "Even firetrucks with sirens blaring slow down at intersections lest they cause further preventable trouble."
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