I think the main issue is that we are not including the expiration of certain transfer programs. Post-transfer income is genuinely worse for people that during the pandemic. It's normal for people to be unhappy that they have less money than last year even if it the program itself was temporary. One example is the child tax credit. That pretty much explains the down mood of all people with children.
That could explain some, coupled with inflation. The average amount of transfers people have received has been slowly increasing for the past 2 years, but not at a rate that would account for inflation: https://fred.stlouisfed.org/series/B087RC1Q027SBEA.
I appreciate the insights, Jadrian. The impact of wealth inequality and inflation perceptions on public sentiment is often overlooked. This post sheds light on why so many feel economically insecure even when the economy seems to be thriving.
It is a puzzle, but “personal experience” does not seem to be the answer as people report thinking their personal situation of better than the national. My guess is that the personal answer is the genuine one and the National one is political - neither Left nor Right being happy with where we are politically.
A “vibecession” is ridiculous, call it what it is, economic and financial illiteracy. Combine economic illiteracy with main stream media journalistic malpractice and utter incompetence (malfeasance) at all three levels of government and no one should be surprised the general public is confused by objective economic facts.
I think the main issue is that we are not including the expiration of certain transfer programs. Post-transfer income is genuinely worse for people that during the pandemic. It's normal for people to be unhappy that they have less money than last year even if it the program itself was temporary. One example is the child tax credit. That pretty much explains the down mood of all people with children.
That could explain some, coupled with inflation. The average amount of transfers people have received has been slowly increasing for the past 2 years, but not at a rate that would account for inflation: https://fred.stlouisfed.org/series/B087RC1Q027SBEA.
Mine comes out Wednesday. I will make sure to give you a shoutout.
I'm excited to see your take on it!
We can discuss it in more detail in-person when we meet this week!!!!!!
I appreciate the insights, Jadrian. The impact of wealth inequality and inflation perceptions on public sentiment is often overlooked. This post sheds light on why so many feel economically insecure even when the economy seems to be thriving.
I've learned a lot from how Chris Clarke handles these topics on TikTok.
The gap between the rich and poor is larger than ever. This is why people are unhappy with the economy. They have no money.
I agree! It was even one of the points I mentioned in the post.
It is a puzzle, but “personal experience” does not seem to be the answer as people report thinking their personal situation of better than the national. My guess is that the personal answer is the genuine one and the National one is political - neither Left nor Right being happy with where we are politically.
A “vibecession” is ridiculous, call it what it is, economic and financial illiteracy. Combine economic illiteracy with main stream media journalistic malpractice and utter incompetence (malfeasance) at all three levels of government and no one should be surprised the general public is confused by objective economic facts.
Feel free to share this post whenever you see someone misinterpreting different indicators. I'm all for improved economic education!