"In 2011, the Great Recession was technically over, but unemployment hovered near 9%, and the recovery felt insecure. Policy interventions like QE2 helped prevent a relapse, but reset the economics of affordability, leading to rising home prices."
"In 2022, households were not overleveraged but financially stable due to over $5 trillion in COVID-era stimulus. However, inflation surged above 9%, and consumer sentiment plummeted, highlighting the disconnect between financial health and consumer confidence."
The University of Michigan Surveys of Consumers measure consumer attitudes and are highly accurate in predicting recessions, with only two false positives since the 1950s. In 2011, despite the end of the Great Recession, high unemployment and underwater mortgages led to policy interventions that prevented a relapse. In 2022, consumer sentiment declined despite households being financially stable due to COVID-era stimulus, leading to inflation and rapid interest rate hikes by the Fed. These events illustrate the complexities of consumer psychology and economic indicators.
Read at www.housingwire.com
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