NORTHVILLE, Mich. (WXYZ) — Since the 1940s, the University of Michigan has surveyed consumers, tracking how they are doing financially and where they think the economy is going.
The latest survey results released last week show consumer sentiment is at a new decade low. The reason: inflation is making consumers feel like they are getting pay cuts.
The survey also found a clear distinction between Republican, Democrat and independent participants.
Economists say as a result partisan beliefs may be impacting the ability to financially plan.
Guernsey Farms Dairy in Northville has been in business for 83 years strong. As a multi-generational family business, its story reflects our region’s history and economy. Seven Action News stopped at the business to talk to people about how they are experiencing inflation.
Joe Kinville, grandson of Guernsey Farms Dairy founder John McGuire, says you can see inflation in so many stories we tell.
“(My grandfather’s) first job out of high school was for his neighbor, splitting wood from sunup to sundown for 75 cents a day. And he was happy with that," Kinville said.
At Guernsey Farms, they've held on to one of their old menus. They aren’t sure how old it is but estimate it’s about 50 years old.
A cheeseburger at that point was about 30 cents. Now it is going to cost you about $12, but today’s burger is probably bigger.
Seven Action News talked to people dining at the business about the inflation they are witnessing right now in the economy.
“I just keep thinking, I have to keep working a little longer, which I just turned 71,” Keith Schilling, a customer at Guernsey Farms Dairy, said.
Schilling and his wife Teri say they feel pessimistic and concerned inflation will continue to dramatically increase expenses.
“It’s going to go high,” Shilling said.
Three retired teachers from South Lyon Middle School say they are on fixed incomes and concerned about inflation.
“I went shopping yesterday for fruits and vegetables, no meats. And it was $85,” said Sharon Pollock.
“My huge concern is the price of the homes. I have four grandchildren in their 20s. Two of them are actively looking for their first home. They can’t afford it,” said Barbara Lamberjack-Rockel.
"It is going to hurt a lot of people, especially people like us," said Wynn Jurrjens.
They are not alone.
The University of Michigan survey shows that consumer expectations on the economy dropped to 54.3 this month — that is a 31.9% decrease from a year ago as people expect their financial situation to get worse due to inflation.
They asked those surveyed whether they are Republican, Democrat or independent. The index shows Republicans are much more pessimistic and Democrats are much more optimistic.
Professor Richard Curtin, who collects the data, said independents tend to have expectations for inflation more in line with the projections economists have.
“Well, it is a dangerous time to be an economic forecaster,” said Steven Miller, Director of the Center for Economic Analysis at Michigan State University.
“Mid-term, we expect the Federal Reserve to be pretty aggressive fighting inflation here in the U.S. We expect that to have an impact on the growth of inflation. Right now, it is hovering around 6%. Most projections out have the whole of 2022 around 4% overall,” Miller said.