ICYMI: Ten Charts That Explain the U.S. Economy in 2023—Chart 10: Consumer Sentiment Improved

The U.S. economy defied expectations this year. Many forecasters predicted a recession, some even asserting a "100%" probability of a recession. President Biden never believed that was necessary—and he was right.

Instead of a recession, inflation is down to 2% over the last six months, unemployment has stayed below 4% for 22 months in a row, and wages, wealth, and income are all higher now than they were before the pandemic began. While there is more work to do—from lowering prescription drug and energy costs to cracking down on price gouging by banning hidden junk fees and calling on corporations to pass savings on to consumers—this year has brought remarkable progress.

The Council of Economic Advisers is highlighting ten charts that capture the most important economic developments of the past year. They depict an economy growing from the middle out and bottom up—powered by Bidenomics.

Chart 10:

Consumer sentiment improved in 2023.

With more work to do on lowering costs, consumer sentiment has further room to grow. However, 2023 saw momentum in the recovery of consumer attitudes. One way to see this is by tracking the same workers over time in the University of Michigan Survey of Consumer Sentiment. Figure 10 shows the difference between the share of respondents who report higher sentiment than they did six months prior and those who report lower sentiment over the same period.  Values greater than zero indicate that more respondents are reporting improved sentiment over the period versus a decline in sentiment.   Throughout 2023, the net share of respondents reporting higher sentiment than they had 6 months prior reached between 10-20 percentage points, a level of momentum historically associated with robust economic growth.

Read the full blog here.