On Friday’s “PBS NewsHour,” NPR host Roben Farzad stated that people are upset with the state of the economy because prices are far higher than they were before even with the rate of inflation declining and “the prices are sticky upwards and will stay with us.” And the average man on the street is “locked out of the housing market.”
Co-host Geoff Bennett asked, “[T]here is this disconnect between the actual strength of the economy and people’s perceptions of it, what so many Americans apparently tell pollsters, they have sort of a grim view of the economy and where it’s headed. What accounts for that?”
Farzad answered, “I think a lot of people are still anchored in pre-pandemic prices. You knew what $20, $40 bought you at the grocery store. And now you’re still indignant that that carton of orange juice is smaller than it was before, and the price is higher or what bread or eggs cost or taking your kids out for pancakes on a Sunday. And you’re anchored to that thinking and saying, until and unless we revisit the prices from yesteryear, we are not out of the woods. But, in reality, that’s not how inflation works. People are running victory laps right now, but the pace of inflation is moderating and maybe we’ve killed inflation, but the prices are sticky upwards and will stay with us.”
He added that “I don’t know if you go to a man on the street and say, hey, core CPI’s increase is falling, anybody is going to be happy about that. They’re going to know that they’re locked out of the housing market. They’re going to know that a mortgage rate at, whatever, 7.5%, is still nowhere near the 2 or 3% mortgage they were able to get during the pandemic.”
Follow Ian Hanchett on Twitter @IanHanchett
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