By all accounts, the U.S. economy is humming along quite nicely. Unemployment is low , recession fears are abating, consumer spending is healthy, and wage increases are finally beating inflation.
Scroll on social media or talk to your friends, though, and the good news doesn’t seem to be translating. A recent CBS poll found 61% of respondents believe the economy is struggling, and, given the choice between good or bad, 65% describe the economy as the latter. Why is there such a disconnect?
The short of it: Facts and figures don’t always line up with how people perceive their lived experience. In the case of the U.S. economy, years of rising prices and recession fears have left some households afraid of what’s to come. The vibecession, as some commenters have called it, is alive and well.
The economic news for the first half of 2023 was dominated with big tech layoffs, rising interest rates, and bank failures, says Kelly Gilbert, fiduciary investment advisor at EFG Financial in Grand Rapids. So, while we have jobs, Americans have always been waiting for the other shoe to drop.
Inflation may be moderating, but it’s not reversing: Everything from food to housing still costs a lot more than it did a few years ago And while wages may be rising now, they weren’t keeping up with inflation for the past two years. In fact, real wages have barely risen from pre-pandemic levels, meaning families haven’t really gotten a raise in more than three years. There’s a lot of ground to make up, and that matters a lot more to people than a headline jobs number.