Central bankers, their pet economists, and assorted politicians may not like to talk about it publicly, but inflation is roaring ahead even as consumers’ outlooks turn sour.

In part, it’s a mis-match between wage increases and prices. As the Wall Street Journal reports, prices for September “rose at the fastest pace in 30 years…while workers saw their biggest compensation boosts in at least 20 years…”

That would indicate wages are falling behind, which has a tendency to fuel both demands for even more wages (pushing inflation even higher) and changing consumer behavior (generic soda pop, anyone?).

The upshot would mean a quick return of higher interest rates, which affect not only workers, but also that thing politicians pretend doesn’t matter: interest payments on new government debt.

Maybe that’s why people are a little less sunny these days:

An index of consumer sentiment also released…by the University of Michigan showed Americans remain in a glum mood. The index fell to 71.7 in October from 72.8 in September. It remains well below the level of 101 registered in February 2020, before the pandemic hit.

Consumers in October also anticipated the highest year-ahead inflation rate since 2008 at 4.8%, according to the sentiment survey. Higher consumer inflation expectations are a concern for policy makers because they could prompt firms and workers to raise prices and salary demands in the future, making the expectations self-fulfilling.

America’s nostalgia tour through the economic hardships and malaise of the 1970s may just be getting started.