Economic Pessimism Makes Sense Right Now
American consumers are consuming less and probably will be for a while, which explains their dissatisfaction with the economy.
Not a sight consumers want to see.
Photographer: Michael M. Santiago/Getty Images North AmericaMost Americans believe that the economy is getting worse, and economic confidence measures are low. At the same time, as analysts have pointed out, a lot of the economic data look pretty rosy. The unemployment rate is 4.6% and falling, and U.S. consumers have built up $2.3 trillion in extra savings over the course of the pandemic.
My Bloomberg Opinion colleague Justin Fox has helpfully explained this divergence of perspectives, but I would like to ask a slightly different question: Which view of the economy is “right” — the public’s or the data’s? On this issue, I side with the pessimistic voice of the people. Although I am optimistic about the U.S. economy in the long term, current conditions and near-term prospects are still subpar.