Why many Americans feel unhappy about the economy despite indicators of improvement

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• Geoff Bennett:

  Today's latest jobs report is proof again of a labor market that has been resilient and often stronger than expected. That was part of the president's message during the State of the Union last night as well.

  But many Americans don't feel the economy is strong overall, or helping them or their families. A number of polls have shown this, including one from The New York Times this week that found 51 percent of Americans believe the country's economic conditions are poor right now.

  So, why the disconnect?

  Economics correspondent Paul Solman explains.

• Seth Read, ESL Teacher:

  I think, if you talk to the average person the street, they are going to say that the economy is not doing well. And I tend to agree.

• Paul Solman:

  Seth Read is a teacher in Northern Virginia.

• Seth Read:

  I am doing fine, but still living paycheck to paycheck.

• Paul Solman:

  Alyssa Gonzalez co-owns the Treehouse Cyclery in Denver.

• Alyssa Gonzalez, Co-Owner, Treehouse Cyclery:

  I have kind of accepted more of like a realistic view of the world, where things aren't going to get better.

  Nonprofit executive Erik Hicks was the most succinct.

• Erik Hicks, CEO-Integrator, Metro Caring:

  I don't feel great.

• Paul Solman:

  But how can people feel so bad and even tell pollsters just that if the economy has been doing so well, low unemployment, inflation easing?

• Kyla Scanlon, Writer, Video Creator:

  I publish these social media videos every day, TikTok, Instagram Reels, YouTube Shorts.

• Paul Solman:

  Kyla Scanlon is a writer, social media personality and demystifier of economics.

• Kyla Scanlon:

  It's getting like hundreds of comments a day telling me how people were perceiving the economy, because I would make a video being like inflation is going down, like the market's OK. And people were like, no, I feel really bad.

• Paul Solman:

  The words she coined to describe what she was hearing, vibecession.

• Kyla Scanlon:

  The vibecession is this idea of a disconnect between consumer sentiment and economic data and why people feel bad about the economy, despite the economic metrics telling them that the economy is doing OK.

• Paul Solman:

  In fact, the consumer sentiment index has noticeably improved, says economist Justin Wolfers.

  Justin Wolfers, University of Michigan: People seem to be a little bit more willing to admit that, in fact, that long nightmare of the post-pandemic recession and hard times and recovery behind us, and people seem a little more willing to admit that things are doing OK.

• Paul Solman:

  But many Americans say they remain unhappy with the economy. Why the disconnect? Well, the key reason for a lot of people, prices are still higher than they were pre-COVID.

  Seth Read used to shop at Safeway right next to his apartment. Now he drives to Aldi for less expensive groceries.

• Seth Read:

  Everything's going up in price.

• Paul Solman:

  But lower inflation doesn't mean lower prices. It just means prices are rising more slowly than they were, Scanlon explains.

• Kyla Scanlon:

  If you're thinking that inflation going down means that prices are going down, you're going to be very confused when you go to the store and your box of cereal is not cheaper. You're like, but I heard on the media that inflation is going down. What's going on?

• Paul Solman:

  Well, cereal prices barely budged this past year, but they rose by more than 25 percent during the pandemic and still aren't back to where they were pre-COVID. Same for eggs, which nearly tripled, but at today's average of $2.50 a dozen still almost double what they were pre-COVID.

  Alyssa Gonzalez now looks for cheaper items.

• Alyssa Gonzalez:

  A lot more canned foods, box foods, just like 12 pack of ramen noodles because it gets the job done.

• Paul Solman:

  And food manufacturers themselves have pushed prices higher than their costs, says Scanlon.

• Kyla Scanlon:

  Firms are out there just raising prices and they're telling you that. In their earnings reports, they're like, yes, we're going to expand our profits.

• Paul Solman:

  This is so-called greedflation, firms taking advantage of consumer expectations that prices will keep going up. And why wouldn't they?

• Kyla Scanlon:

  Like, well, duh, they're going to do that. They're companies. That's their goal, is to make a bunch of money.

• Paul Solman:

  And then there's shrinkflation, firms charging the same for what turns out to be a lesser quantity. Here are recent examples flagged by the Web site Consumer World.

• Seth Read:

  You're getting less and you're paying more. The little divot at the bottom of sauce containers is becoming more. So you're getting less sauce. And it's just — it's kind of ridiculous, to be honest.

• Paul Solman:

  There's one group especially sensitive to food prices, the least well-off, who spend more of their budget on food.

• Erik Hicks:

  They're not able to make ends meet.

• Paul Solman:

  Erik Hicks runs a Denver area food bank.

• Erik Hicks:

  The community and the members who are coming to access services aren't able to pay for the rising prices in groceries and food and other resources.

• Paul Solman:

  And get this. Cheaper food went up at twice the rate of premium foods during the pandemic. But, to Scanlon, the real killer is housing. House prices have gone up, mortgage rates and people's rents.

• Kyla Scanlon:

  And so when you tell them that things are getting cheaper, but their rent is not getting cheaper and their food is not getting cheaper, of course they're going to feel bad.

• Alyssa Gonzalez:

  It feels a little daunting to know that I will be renting for a while and renting prices going up so much every year.

• Paul Solman:

  For Alyssa Gonzalez, homeownership is out of the question.

• Alyssa Gonzalez:

  I don't believe that I will be able to buy a house. It's something that I have kind of just accepted.

• Paul Solman:

  So many face additional financial stressors with the end of COVID checks and the higher cost of borrowing. And then there's the renewal of student debt payments. Gonzalez has over $100,000 worth.

• Alyssa Gonzalez:

  If I factor that into my normal bills of close to $2,000 a month for just rent, and then groceries and all the other things, then it's just not feasible.

• Paul Solman:

  Not feasible for Gonzalez to pay back her student loans.

• Alyssa Gonzalez:

  It sucks because I'm not going to ever be able to pay off that debt. And it's one of the things that impacts me with my credit and being a business owner and just being able to apply for loans and get cars or anything like that.

  And so it kind of feels unsolvable, but it's so big of a problem that there's nothing I feel like I can do about it.

• Paul Solman:

  Even yuppies feel worse than they did during COVID.

• Brett Mead, Attorney:

  The yuppie lifestyle subsidy was in full force. Ubers were cheap, Airbnbs were cheap, food delivery apps were cheap.

• Paul Solman:

  But not anymore.

  So, Brett Mead fellow yuppies feel relatively worse off.

• Brett Mead:

  I think they feel negative about the economy in part because their cost of living has gone up.

  But economist Wolfers thinks something else is driving the pessimism reflected in some polls.

• Justin Wolfers:

  The way that people answer these public opinion poll questions has fundamentally changed. What these tend to do instead of saying, well, here's the newspaper articles I read and here's what I see around me, they think, is my team winning right now, my team being Republicans or Democrats?

  Those who lean Republican reliably now were more optimistic under Trump and incredibly pessimistic under Biden, and Democrats are the opposite. What I think that tells us is less about the reality of the economy and more about how partisan and polarized views have become.

• Paul Solman:

  Even so, the economic reality for Seth Read, at least, compared to that of his parents at his age, is kind of a bummer.

• Seth Read:

  They had a house. They had two cars. They had stable incomes. They were definitely much more stable than I feel. Rising costs of childcare are the number one reason why my fiancee and I haven't even thought about having kids in the near future.

• Paul Solman:

  So maybe it should come as no surprise, a statistically good economy for many, but for more than a few Americans, a bad economic vibe.

  For the "PBS NewsHour," Paul Solman.