- The majority of Americans surveyed by Harris believe that the United States is already in an economic recession.
- About half of Americans surveyed also believe the S&P 500 is down this year and unemployment is at a 50-year high.
- In reality, none of this is true, and it highlights a big disconnect between Americans' perception of the economy and reality.
The American economy is in recession.
At least that's what the majority of Americans think, according to a recent report. poll conducted by Harris for The Guardian.
In fact, the economy is not in recession and, by some indicators, is operating at full capacity. GDP growth since the pandemic has increased at a faster rate than in the previous decade, and unemployment is near historic lows.
The poll results highlight a significant gap between reality and Americans' perception of the state of the economy.
The poll results indicate that 49% of respondents believe the S&P 500 is down in 2024, when in reality it is up about 11%, extending the 24% gain recorded in 2023.
Nearly half of those surveyed believe unemployment is at its highest level in 50 years, when in reality the unemployment rate has been below 4% for more than two years and is near its lowest level in 50 years.
And 72% of respondents said they thought inflation was rising, when in reality inflation peaked at 9.1% in June 2022 and has since been cut by more than half.
A record number of Americans are employed, incomes are growing faster than the rate of inflation, and 401k balances are at record levels. Yet most Americans surveyed by Harris believe the economic situation is dire.
The cause of the disconnect appears to be continued dissatisfaction with inflation.
Even if the data shows that inflation has been largely contained, While prices are rising at a much slower pace than they were during the pandemic, Americans are still feeling the impact of rising prices at grocery stores, at car dealerships and in the housing market.
Americans want prices to return to pre-pandemic levels, but that requires deflation, not disinflation. Such an event would likely coincide with a very weak economy and is therefore unlikely.
What also seems to be driving Americans' disconnect between their views on the economy and the real economy is politics.
When polled by Harris, 58% said they believe the economy is getting worse because of the Biden administration's mismanagement. This dynamic is on full display when the results are broken down by political affiliation.
While 56% of respondents said they believed the economy was in recession, that figure was higher for respondents who identified as Republican, at 67%, while respondents who identified as Democrats and those who said the United States was in recession were lower, at 67%. 49%.
The survey results highlight the “vibecession” that millions of Americans have felt over the past year, and it may ultimately be a big problem for President Job Biden's re-election chances.