Catherine Rusoff
Americans have been notoriously gloomy about the country’s financial prospects in the post-pandemic years, with just a third describing the economy as good in a CBS News poll earlier this year.
But there is increasingly a gap between how a large portion of Americans think the economy is performing and what leading indicators show – a dissonance that some describe as a “vibecession.” In part, this disconnect reflects the limitations of economic measurement, which often does not capture the financial realities that millions of Americans face.
That said, when asked about key economic trends and data, more than half of Americans are misunderstanding the facts on some basic financial questions, according to one study. new vote by Harris/The Guardian.
Do you think you have an accurate read on the state of the US economy? Answer the following four questions to find out.
Is the US in a recession?
Ah yes
B) No
To respond: The correct answer is B. As commonly defined by economists, a recession is a decline in economic activity, or when GDP is negative. Given that GDP has been growing – fueled in part by strong consumer spending – at rates that have exceeded economists’ expectations, the US economy is not in recession.
What Americans believe: About 56% of those surveyed by Harris/The Guardian said the US is currently experiencing a recession.
How did the S&P 500 index perform in 2024?
A) Inventories are up this year
B) The stock market is down for the year
C) The market remains unchanged
To respond: The correct answer is A. The S&P 500 – a gauge of the broader stock market – is up 11% this year.
What Americans believe: About half of the people interviewed by Harris/The Guardian said the stock market is down this year.
How does the current unemployment rate compare to previous periods?
A) The unemployment rate is now close to the lowest level in the last 50 years
B) The unemployment rate is near a 50-year high
C) The unemployment rate has not yet recovered from the pandemic
To respond: The correct answer is A. The unemployment rate stood at 3.9% in April, close to The minimum in 50 years. Current unemployment figures are also similar to levels recorded before the pandemic, indicating that jobs lost during the crisis have been recovered.
What Americans believe: About half say unemployment is close to a 50-year high.
Is inflation increasing or decreasing?
A) Inflation is rising
B) Inflation is falling
C) Inflation is not changing
To respond: The answer is B. Inflation, which measures the rate of change in prices, has been declining since peaking at 9.1% in June 2021. In the most recent CPI reading, inflation was 3.4% in April.
What Americans believe: About 7 in 10 responded that they believe inflation is rising, the Harris/Guardian poll found.
Are prices still rising? Yes. Although inflation – the rate at which prices change – is falling, prices continue to rise. Falling inflation simply means that these price increases are moderating from the large increases seen in 2022.
