Betsey Stevenson, Columnist

Anger Is What’s Driving the US Economy

A deep-seated resentment about a “rigged” system has been simmering since long before the pandemic and continues to affect consumer attitudes.

November 13, 2023 at 11:00 AM UTC

By Betsey Stevenson

Betsey Stevenson is a professor of public policy and economics at the University of Michigan. She was on the president’s Council of Economic Advisers and was chief economist at the US Department of Labor.

Future holiday spending.
Photographer: UCG/Universal Images Group Editorial

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As it turns out, the big economic story of 2023 is not a recession, as many had predicted — it’s the disconnect between consumer sentiment and behavior.

Higher than normal inflation over the past two years is an obvious reason that people would be down about the economy. The puzzle is why people are still behaving as if their economic situation is good. Inflation-adjusted consumer spending is way up: Not only above 2019 levels, but above the pre-pandemic trend. In fact, it’s largely the reason that US economic growth is above expectations. And yet consumer sentiment is at levels typically seen only in a recession.