Jamie O’Regan earns a six-figure salary as the director of alumni relations at a private school in Brooklyn and lives in a Jersey City apartment with a rooftop pool.
But Ms O’Regan, 38, is feeling the pinch of higher prices. Effective July 1, her landlord increased her rent by $500, to $2,900 a month. She got rid of her car, which was costing her $600 a month between parking, insurance and loan repayment. Able to work from home during the summer, she saved $100 a week by not commuting. She would like to buy a house, but sees no way to do so and is now considering taking on a roommate.
“If I feel like I’m living paycheck to paycheck, how does the average person work? said Mrs. O’Regan. “It seems that no one feels safe from this. »
Economists say weak consumer sentiment is unlikely to turn an otherwise healthy economy into a sick economy. But it could amplify or prolong an already bad situation. In marginal cases, an official declaration of recession – and the media attention that comes with it – can create significantly worse outcomes than weak economies that barely escape recession.
The relatively brief recession of 1990 and 1991, for example, had no obvious cause such as an asset bubble. For this reason, the researchers speculated that it may have been fueled by a national bad mood brought on by the Gulf War, an oil price shock and rising interest rates.
Yet the link between consumer perceptions and economic outcomes is not straightforward. Sentiment fell sharply following the terrorist attacks of September 11, 2001, for example, but real spending rebounded quickly, perhaps due to a rally effect around the flag that helped support the economy quickly. after the dot-com collapse.