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Justin Fox

Why Americans Are So Grumpy About Their Economic Boom

There’s a big gap right now between consumer sentiment and statistical indicators. It should narrow, but may not go away.

Lots of numbers are going up.

Lots of numbers are going up.

Photographer: Bridget Bennett/Bloomberg

The U.S. economy is growing at a pace not seen in decades, with economic forecasters surveyed by Bloomberg expecting real gross domestic product growth of 5.7% this year and 4% in 2022. Eighteen months into the post-pandemic economic recovery, nonfarm payroll employment grew by an impressive 531,000 in October and is up by an average of 655,500 over the past six months. The unemployment rate is down to 4.6%, and wages have been rising briskly. Oh, and the Standard & Poor’s 500 Index gained 37% over the 12 months ending Nov. 3, its best performance ever in the year following the election of a new president.

Yet Americans’ attitudes about the economy seem to be quite negative. The Gallup Economic Confidence Index was almost as low in October as it was amid the pandemic lockdowns of April 2020, and the University of Michigan Consumer Sentiment Index is even lower. An October poll by the The Associated Press-NORC Center for Public Affairs Research found that 65% of respondents thought the U.S. economy was “poor.” Exit polls in Virginia last week rated the economy as the top issue of concern.