Setting the record straight, we are not in a recession
Recent polls of Americans across the country show some startling misconceptions about how well the country is doing economically. Since these misperceptions affect us from the national to the local economy, and since this is an election year, we thought it would be a good time to point out the difference between facts and fiction.
The US economy is performing well globally
First, Americans somehow believe the country is in a recession. It is not. A Harris Poll this week found 53 percent of Americans believe we are in a recession. That includes 63 percent of Republicans and 49 percent of Democrats. But the reality is that the last recession we had was in 2020, just as the nation plunged into the depths of the pandemic. At the time, unemployment reached 20 percent, supply chains were stretched and product shortages fueled inflation.
Economists around the world say that not only has America recovered better than any other country from the COVID-19 pandemic, our economy is now considered the envy of the world. Our gross domestic product (GDP) is growing at 2.8 percent annually, with each quarter’s growth better than the last and growing faster than at any time during the Trump administration.
In that poll, many Americans blamed Biden for the state of the economy, with 58 percent of those polled saying the president’s mismanagement of the economy was worsening.
But the poll revealed that people have complex feelings around various aspects of the word „economy”, especially „inflation”. The truth is – the economy is booming, contrary to those who say we are in a bad way. Could this be a fact?
Inflation is falling
A majority of survey respondents, 72 percent, said inflation is rising.
But the post-Covid inflation rate in June 2022 was 9.1 percent. It has declined sharply by three to four percent annually. In April, the inflation rate went down 3.4 percent from 3.5 percent. This is nowhere near the 16 and 17 percent inflation rates experienced by at least the over-60s during the Reagan era in the 1980s (always good for the economy for Republicans).
The Dow Jones hit an all-time high this month
News of falling inflation was so good news that it sparked a stock market rally that pushed the Dow Jones index above 40,000 for the first time in history.
In fact, stocks are up 11 percent this year, and stock prices are up 45 percent since President Joe Biden took office.
Unemployment is at an all-time high
Contrary to another myth, our national unemployment rate (and our state unemployment rate) is less than four percent. Unemployment remains at a 50-year low — not, as the legend-makers say, a 50-year high.
That respect came as unemployment numbers approached Great Depression-era figures during the Trump administration, and given the common emotional fear of most Americans — a scenario of loss, isolation, and death — it’s not an unreasonable one.
Facts vs. Fantasy — Why the Disconnect?
Experts admit they don’t understand all the reasons for consumer distrust. But the poll shows that consumer confidence has declined Less than six months In May, around the same time that people started saying they personally felt better about the economy. As ProPublica reports, „There is a stubborn gap between the reality represented in that data — what economists use to measure the economy’s health — and the emotional reality that underlies how Americans feel about the economy. In the poll, 55 percent think the economy is getting worse.”
Of course, a person’s views on the economy may be colored by what political party they belong to. It may also be colored by where you personally are on the economic spectrum — the richer you are, the more likely you’ll be happy with Trump’s tax cuts for the rich.
Turmoil breeds uncertainty, and we’ve certainly had that over the past several years, including far-right control of the executive branch, a global pandemic, major civil rights upheaval, the January 6 riots, and the rollback of women’s suffrage. For reproductive care.
It is also true that the price hikes we endured since the pandemic took an emotional toll. Every time we go to the grocery store, we’re reminded that we’re paying more for a package of certain items—and it’s smaller than it used to be.
A few national media outlets have reported something called „vibration”. What do you say? It’s a term coined by economics writer Kayla Scanlon (we hope it doesn’t stick). to describe Widespread pessimism about the economy defies statistics showing that the economy is actually doing well.
For the optimists among us, it’s enough to speak up to remind people that things can be a lot worse – and have been in the past – but they’re not right now. I think the glass is half empty – or the glass is half full.