Inflation, partisanship and the pandemic have made them glummer than the numbers suggest they should feel “The vibes are off” is a phrase that does not usually appear in rigorous economic analysis but has cropped up again and again in serious discussions about America over the past year. From an array of hard data, there is reason to think that people ought to be quite satisfied about the state of the economy: inflation has slowed sharply , petrol prices are down, jobs are plentiful , incomes are rising and the stockmarket is strong . But survey after survey suggests that Americans are in fact quite unhappy. They think that the economy is in bad shape and that President Joe Biden is mismanaging it. What gives? Start with the evidence of gloom. The figure watched most closely by economists for an idea of what people are feeling is a consumer-sentiment index from the University of Michigan. For the past two years it has bounced around at levels last seen during the global financial crisis of 2007-09. Even with an improvement in December, it is still 30% below its recent peak on the eve of the covid-19 crisis in early 2020. image: The Economist Many other surveys are equally downcast. Every week since 2009 The Economist /YouGov poll has asked some 1,500 Americans to assess the economy: nearly half now think it is getting worse, up from about one-third in the decade before covid. Questions focused on Mr Biden’s record yield even less enthusiasm: two-thirds of respondents to a Gallup poll in November disapproved of his handling of the economy. And all this despite America outgrowing its large, developed peers over the past few years. The fact that so many Americans are so dejected about such a strong economy has spawned […]
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