Americans Refuse to Be Happy - The Atlantic

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According to Americans, it is bad out there. Real bad. This month, the University of Michigan’s index of consumer sentiment dropped to its lowest point since 1952, when the survey started. A poll of potential Republican voters found that just 43 percent rated the economy as “excellent” or “good” and 55 percent as “fair” or “poor”; for potential Democratic voters, the shares were 5 percent and 94 percent, respectively. Low-income families are nervous, and so are high-income ones. Students and retirees are dour. Rural and urban voters are dissatisfied. People are worried about the present and future. They’re concerned for themselves and their neighbors.<br>Indeed, households are feeling worse about their personal finances and the broader state of the economy than they did during the Great Inflation of the 1970s, when the cost of groceries doubled and the government was forced to ration gasoline; the Volcker shock, from 1979 to 1982, when the average interest rate on 30-year mortgages hit 18.6 percent and the country went into devastating back-to-back recessions; the early months of the coronavirus pandemic, when 200,000 firms collapsed, the unemployment rate flirted with 15 percent, and essentials such as infant formula became impossible to find; and the Great Recession, when the stock market lost half its value, the banking system teetered on the brink of implosion, and lenders foreclosed on 6 million homes.<br>I have been covering the “vibecession” for a few years now, and I thought I mostly understood it. Headline economic statistics are failing to capture the fragility and strain that consumers are experiencing. Families are struggling to afford child care and health care. The housing shortage is eating into incomes. Inflation is pissing consumers off every time they hit the grocery store. Inequality is cleaving the haves and the have-nots. A hiring freeze is preventing young people from embarking on their chosen career. But seeing the latest consumer-sentiment figures and comparing them with hard economic data, I found that my usual explanations fell short.<br>Annie Lowrey: The everything recession<br>Americans are expressing some of the deepest, broadest, and stubbornest economic pessimism ever recorded. They’re doing so even though nearly every American who wants a job has one and the stock market is booming. Things aren’t perfect, and people have plenty of reasons to be disappointed. But I couldn’t come up with a coherent explanation for why people are this down about an economy this good, or why they are so mad right now.<br>Instead of trying to understand why the American people were right, I began trying to understand why they were wrong. We shouldn’t call it a vibecession anymore, I came to think. Vibes are temporary, and whatever this is isn’t going away. It’s a “permacession.” People have stopped believing that the economy can be good, and have lost the willingness to admit that they are doing well. That pessimism might be harder to fix than an actual downturn.<br>At this point, I feel obligated to harp on an unpopular and perhaps even offensive truth—a truth that Americans don’t want to hear and don’t want to believe, a truth that might get me ripped apart in the comments and actually-ed across the internet: This economy is delivering significant improvements in living standards for the majority of American families across the income spectrum. This economy is pretty darn great.<br>Ninety-six out of every 100 Americans who want a job have one. The rate of underemployment is low, and the rate of labor-force participation is high, meaning that there’s no pool of discouraged workers lurking behind the marquee jobs statistics. Young workers are struggling to establish themselves, given businesses’ caution around hiring. Still, the tight labor market has fueled wage gains that have swelled family budgets, even after accounting for inflation. Real disposable personal income, which measures how much spending power Americans actually have, is at a record high. Inequality has eased, following an extended period in which the earnings of low-income Americans grew faster than those of their rich peers. People are spending more than they ever have on rent and health care, sure, but also on DoorDash and meals in restaurants, vacations, cars, pets, clothing, and “wellness”—concierge doctors, supplements, red-light masks. Part of the reason app-based gambling has taken off is because dudes are flush enough to afford stupid prop bets.<br>A few years ago, or even one year ago, we had much more reason to worry. In 2022, nominal prices jumped 8 percent, forcing the Federal Reserve to jack up interest rates. Economists debated whether the country would need to undergo a brief recession to restore price stability, or whether we would end up in a 1970s-style stagflationary cycle. Pretty much everyone thought we would enter a double-dip downturn. Yet businesses and...