On average, the statistics would seem to indicate that the U.S. economy is doing better. Inflation dropped below 5%, the lowest rate in two years, and unemployment decreased to 3.5%, a fifty-year low. Wages are up overall, and housing prices are beginning to ease.
So why does a record sixty-nine percent of the American public hold negative views about the economy both now and in the future?
Because those optimistic figures don’t tell the whole story. While overall income in the U.S. has risen over twenty-five percent since 2000, median household income has risen only seven percent, and wages for working class earners have barely stayed ahead of inflation. Income for the top one tenth of one percent of earners, by contrast, has jumped forty-one percent, and corporate profit rates and revenues are at an all-time high, a factor that created more than half the current inflation. So, for the fortunate few, the economic situation is looking good.
As for the rest of the U.S., higher interest rates have reduced the ability of average Americans to afford rent or mortgage payments, to buy car, or to pay off credit card balances. The price of natural gas for home heating has more than doubled since this time last year. The average price of a home in the U.S. has increased by thirty-five percent in just the last five years, while the average mortgage rate has more than doubled since 2020, a combination that effectively increases the cost of buying a house by almost 2 ½ times.
The overall prices of goods in America have increased by 67% (even after adjustment for inflation) since 2000. Less than half of all Americans can afford to pay an unexpected cost (medical, car repair, etc.) without going further into debt or simply being unable to pay.
At the same time, the U.S. has the lowest life expectancy of any high-income country in the world, the poorest access to health insurance, the longest working hours, and the least parental leave and paid vacation. Also, by the way, we have reached the point where firearms are the leading cause of death for children and teenagers.
Those factors might just explain the disconnect between the favorable statistics and the way most people feel.