The U.S. economy is strong, but people are reportedly holding onto negative feelings about it.
The disconnect is between various economic indicators pointing to a healthy economy and public perception of the current environment.
The White House pointed to lower prices for turkeys leading up to Thanksgiving, a drop in egg prices, lower Medicare costs for insulin, and a decline in gasoline prices from the peaks experienced in the summer of 2022 as evidence that costs are coming down, reported the Associated Press.
However, Virginia Gov. Glenn Youngkin, speaking at an event in Washington, D.C., said, “The challenge is [the] rising cost of living. And it’s just clear over the course of now the last three years of the Biden economy, we have seen inflation really run away from a lot of folks and 60% of Americans are living paycheck to paycheck,” per the AP.
Unemployment is at historic lows, wages are rising, inflation is slowing, consumers are spending, new home construction is increasing, gross domestic product is on the rise, and consumer confidence is significantly up year over year, so why are people still struggling?
“You used to be able to get five bags of groceries for $50, now you only get one bag for $50,” Janet Ortigoza, a new mom in California, told NBC News. “I am honestly scared to have another baby because I don’t think we will be able to provide for another baby. Now that she’s growing, she’s going to start eating three times a day, and just trying to provide the right nutrition to her, it’s hard.”
Ortigoza is not imagining it; food prices have gone up 25% since 2020, according to NBC News. The price of a loaf of white bread has nearly doubled. People are struggling to afford food at these prices, and some are going hungry as a result. Rent is also up nearly 30% since the COVID-19 pandemic began.
Some 81% of registered voters characterized the economy as either “fair” or “poor,” according to a New York Times/Siena College poll.
Another consumer, Jennifer Estrada, told NBC News that she was making $7 more an hour than a year earlier but that her rent had more than doubled. At the same time, her grocery bill also increased beyond her newly increased spending power.
“There are definitely many times, as a mom, where you cook, and you make sure they eat, and you go a little bit lighter that night,” Estrada said. “But I strive to make sure that they don’t go hungry.”
Everyday costs are not the only things making Americans feel poor. Rents across the United States have risen steadily for the last two years. Yet they pale compared to the meteoric rise in the cost of owning a home. A Wall Street Journal graph shows that when Biden took office, the average monthly payment for a new home was $1,787; today, it is $3,322.
There has been a 26% increase in people claiming to be worried about the economy, as measured from August 2020, during the last days of the Trump administration, and November 2023, with concerns about the economy outweighing foreign policy and national security by a factor of four, according to a CNN poll.
There is some good news, though, as inflation continues to decline.
“This is not a one or two-month story — the economy is cooling, and that will put further downward pressure on prices,” Gregory Daco, chief economist at EY-Parthenon, told CBS MoneyWatch.
