Sentiment in regards to the U.S. economy is currently in an upswing: 28% of Americans would say the economy is either excellent or good, in accordance with recent data from Pew Research Center. In April 2022, only 19% expressed the identical positivity.
Still, this is much below what perceptions of the economy were pre-pandemic. In January 2020, 57% of Americans said the economy was good or excellent.
Despite indicators that things are looking up, Americans remain pessimistic in regards to the financial state of the country.
More young adults are employed full-time today than in 1993, in accordance with Pew data. Weekly jobless claims from January 8 to January 13 were the bottom they'd been since September 22. And inflation is slowing.
These aspects may not be as encouraging as they seem due to larger, systematic issues, says Kyle K. Moore, an economist on the Economic Policy Institute.
"Recent improvements are happening against a backdrop of many many years of too slow wage growth, increasing inequality, and quite a lot of misdirected public investment that has led healthcare and education to be a source of economic stress," Moore says.
America was pulled out of a recession due to some "smart spending" similar to stimulus checks, but that hasn't fixed the persisting issues.
"The economy is not sick right away," Moore says. "We do not have the flu. But that doesn't suggest we do not have chronic conditions that have to be treated."
High prices remain the stickiest issue. Of Americans who reported feeling just like the economy is fair or poor, greater than 1 / 4 said it's due to high inflation. One other 21% blamed high cost of living and 15% said it was due to low wages.
Prices in supermarkets is likely to be falling, but they should not reflecting a pointy enough change for many shoppers, says Joceyln Kiley, associate director of research at Pew. Frozen vegetable prices are up 6.1% year-over-year and sugar is up 6.9%, in accordance with data from the U.S. Bureau of Labor Statistics.
"A considerable amount of Americans are feeling the consequences of the inflationary period, even when some indicators are moving away from that," she says.
Recent layoffs at major corporations are also likely coloring Americans' view of the economy. Microsoft will let go of 1,900 employees from its gaming unit and Citigroup will lay off 20,000 employees inside the following two years. Google cut several hundred jobs from its hardware and central engineering teams and EBay announced it will be eliminating 9% of its workforce this 12 months.
Plus, larger costs still loom. Tuition at an in-state public university, for instance, is twice what it was 20 years ago, in accordance with College Board. Total healthcare premiums paid in 2023 rose 18% from 2018, in accordance with data from Kaiser Family Foundation. And 2023 was the least reasonably priced 12 months for home buying, in accordance with a Redfin report.
While wage growth has outpaced inflation in the previous couple of years, it's still not aligned with productivity. From 1979 to 2020, productivity grew almost 62% but wages only rose about 23%, in accordance with data from the EPI.
"Wage growth hasn't been in keeping with productivity for 40 years and that comes from a really decimated labor movement because the Eighties," Moore says.
Black and brown Americans are facing more acute financial challenges, he adds. From 1979 to 2020, White employees experienced 30.1% wage growth, while Black and Hispanic employees only earned 18.9% and 16.7% more, respectively, in accordance with data from the EPI.
"There's some reason families are experiencing this economic anxiety," he says. "Stagnant wage growth for a very long time, underinvestment in goods and services, and discrimination inside the economy. That's the background."