Despite having made more money and expanded their businesses in recent years, many Americans are gloomy about the U.S. economy, according to The Wall Street Journal (subscription).
What’s going on: “There’s a striking disconnect between the widely shared pessimism among Americans and measures that show the economy is actually robust. Consumers are spending briskly—behavior that suggests optimism, not retrenchment. Inflation has tempered. Unemployment has been below 4% for 24 straight months, the longest such stretch since the 1960s.”
- The sour outlook cuts across political affiliations, job types and socio-economic status.
Why it’s happening: Geopolitical threats and social tensions are making Americans feel “unstable” about their long-term financial security, the outlet reports.
- “Reliable steps up the economic ladder, such as a college degree, no longer look like a good investment. War overseas, and an emboldened set of hostile nations, have made the world feel dangerous.”
- People report being upset by government spending and “blunder[ous]” international moves.
Better, but still low: While consumer sentiment recently posted its largest two-month jump since the early 1990s, “it remains about 20% lower than during the robust economy of early 2020, just before the COVID-19 pandemic started, and it stands at about levels typically seen at the end of a recession rather than in an economy posting solid growth.”
Wages, inflation and jobs: Wage growth has started to slow, and it’s slowing the most for workers in lower-paying industries.
- Inflation, meanwhile, has improved from its high in 2022—but it only began outpacing price increases in the middle of last year.
- And though unemployment is still at record lows, “layoffs have hit some sectors of the economy with force, including technology and some other white-collar fields, such as accounting and media.”