(The Epoch Times)—Americans expect inflation to worsen in the coming months and have lower expectations regarding personal finances, indicating a dismal national economic outlook.
“Year-ahead inflation expectations rose from 3.2 percent last month to 4.2 percent this month, the highest reading since May 2023,” an Oct. 27 survey report by the University of Michigan states. Coinciding with the surge in inflation, consumer sentiment fell to 6 percent in October after two consecutive months of little change.
“While consumers recognize that inflation has slowed down from its peak last summer, they cannot ignore that their budgets remain stretched and their purchasing power reduced,” chief economist Joanne Hsu, director of the surveys, said in an Oct. 27 statement from the university’s Institute for Social Research.
“Given the high-frequency and widespread nature of food and gas purchases across American families, it is no surprise that concerns over the prices of these goods loom particularly large in the minds of consumers. Even so, strength in incomes continues to support aggregate spending for the time being.”
About 47 percent of consumers reported that high prices—8 percentage points higher than in September—were eroding their living standards.
When talking about inflation, consumers “spontaneously pointed” to the prices of gas and groceries. “Spontaneous mentions of high prices for larger purchases like durables and vehicles have been relatively flat this month,” the Institute for Social Research statement reads.
Regarding personal finances, lower-income consumers saw little change, while middle- and higher-income consumers have seen declines since August, which is partly because of the “recent weakness in stock markets,” according to the statement.
One-year expectations of consumers’ personal finances dropped by 8 percent from last month, while year-ahead expectations of business conditions plunged by 16 percent, the survey report shows.
“The drumbeat of other negative headlines—war in the Middle East, the just-resolved leadership crisis in the House of Representatives, daily developments with Trump’s legal troubles, among others—has produced its own drag [on consumer sentiment],” Ms. Hsu said.
Consumer expectations on long-run inflation edged up from 2.8 percent last month to 3.0 percent this month, staying within the narrow 2.9 percent to 3.1 percent range for 25 of the past 27 months. This is also well above the 2.2 percent to 2.6 percent range seen in the two years prior to the COVID-19 pandemic.
Inflation and Interest Rates
Consumer worries about inflation come as the Federal Reserve has been attempting to bring inflation down by raising interest rates. The action has resulted in the U.S. economy facing an environment of rising prices and elevated interest rates, putting pressure on household budgets and business finances.
Since March 2022, the central bank has raised its benchmark interest rate by 500 basis points to a range of 5.25 percent to 5.5 percent, which is the highest level in 22 years.
During the last Fed meeting, the central bank didn’t raise the interest rates. At the time, Federal Reserve Chair Jerome Powell suggested that there may be no rate hike in the upcoming meeting scheduled for Oct. 31 and Nov. 1.
However, the Fed’s “Summary of Economic Projections” from September left the door open for one more potential rate hike.
Speaking at a business conference on Oct. 2, Federal Reserve Gov. Michelle Bowman said that interest rates may need to move higher to address inflation.
“Inflation continues to be too high, and I expect it will likely be appropriate for the Committee to raise rates further and hold them at a restrictive level for some time to return inflation to our 2 percent goal in a timely way,” she said.
Ms. Bowman warned that there’s a “continued risk that high energy prices could reverse some of the progress we have seen on inflation in recent months.”
Mr. Powell admitted that inflation remains high and that economic growth may need to ease to bring it down to the Fed’s target rate of 2 percent. Annual inflation in September was 3.7 percent.
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However, the economy grew by 4.9 percent in the third quarter of this year, accelerating from the 2.1 percent growth in the previous quarter, which can put pressure on the Fed to raise rates.
Struggling Under Inflation
The elevated rate of inflation has made life tough for Americans. A Gallup survey published in May showed that 61 percent of U.S. citizens were facing financial hardship in their households because of elevated prices—the highest since 2021, when Gallup began to track the data.
“A relatively steady 15 percent of U.S. adults say the hardship created by inflation is ‘severe’ and affects their ability to maintain their current standard of living,” according to a May 18 Gallup survey report. “[This is] statistically similar to the prior two readings and has not varied greatly since the first reading.”
Lower-income Americans faced greater difficulty from inflation than people in the higher income brackets.
An April Gallup poll found that inflation was the top concern for Americans. While 35 percent said that inflation was the biggest issue; 11 percent cited the cost of owning or renting a home; and 9 percent saw “too much debt” as a major problem.
In a recent interview with CNBC, former Walmart CEO Bill Simon said that consumers had an “incredible 10-, 12-year run” when “markets were buoyant, interest rates were low, [and] money was available.”
But now, factors such as inflation and high interest rates are working to sap consumers’ propensity to spend, he said. “That sort of pileup wears on the consumer and makes them wary. … For the first time in a long time, there’s a reason for the consumer to pause.”
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
