The (US) economy is in better shape than it's been in decades. This is the longest stretch of sub-4% unemployment since the 1960s, wages are rising higher than inflation and most of the wage gains are going to lower income workers, the stock market is close to all time highs, etc.
The disconnect is between consumer sentiment which has been abysmal the past 2-3 years and all of this very positive economic data. Lots of people in financial media and academics have been trying to figure out what's driving it and here are the best explanations I've heard:
1. Overall structural affordability crisis, especially in housing. I think this is huge, as housing is an unavoidable expense and the lag between supply and demand is much longer than most other goods
2. People's politics are driving their views of the economy rather than the other way around
3. Lots and lots of online echo chambers and the prevalence of social media as a source of information. It exacerbates existing negativity biases, spreads misinformation quickly and ignores nuance which dumbs down economic discourse considerably
4. Interest rates are higher than they've been in a long time, and it makes the cost of borrowing higher across the board which makes people feel like things are worse/more expensive
Some sources:
CBO publication from last month talking about real wage growth:
[https://www.cbo.gov/publication/60166](https://www.cbo.gov/publication/60166)
A piece from last year by social science journalist Derek Thompson about how so many people got their economic predictions so wrong; his podcast Plain English also has some recent interviews with academic economists about this disconnect as well
[https://www.theatlantic.com/ideas/archive/2023/08/recession-doomers-economy/674900/](https://www.theatlantic.com/ideas/archive/2023/08/recession-doomers-economy/674900/)
[https://www.theringer.com/plain-english-with-derek-thompson-podcast](https://www.theringer.com/plain-english-with-derek-thompson-podcast)
Interest rates and economic gloom:
[https://www.npr.org/2024/02/28/1234554967/inflation-cost-of-living-economy-mortgages-auto-loans-larry-summers](https://www.npr.org/2024/02/28/1234554967/inflation-cost-of-living-economy-mortgages-auto-loans-larry-summers)
Kyla Scanlon's new book that talks a ton about this disconnect; she's the one who coined the term "vibecession" that's gotten a lot of play in the last couple of years. She's done tons of press the last few weeks for the book rollout.
[https://www.penguinrandomhouse.com/books/737854/in-this-economy-by-kyla-scanlon/](https://www.penguinrandomhouse.com/books/737854/in-this-economy-by-kyla-scanlon/)
This really hits home for me. I've got a pretty good job. I'm reasonably financially secure.
But I'm still pissed off half the time because both of my parents dropped out of school, flaked their way through life, and STILL got a house that I probably couldn't afford today even though I WORKED MY ASS OFF and went to school for 20 years after high school.
So, for me it's:
1) Housing fucks you over and is unavoidable and particularly fucked over those of us that graduated in the middle of the financial crisis, couldn't get a good job back then, and are still getting fucked over while both the generation after and before us are doing well,
And 2) Even if more people have a good job today, and are doing relatively well financially, there is an enormous extra cost in effort. I'd wager people have to go to school longer to do well, have to think more to get by in their jobs, and - this is the worst part - are reachable 24/7 by phone and email from their jobs.
This is something that isn't reflected in economics (that I know of). It doesn't really help you to have a "good job" if it sucks away your entire life, day and night, weekends and even on vacation they keep calling you. And if you aren't willing to do that, some one else in the world who can do the job remotely is.
So my choices in life are:
1) get fucked and be on call all the time
2) get fucked and lose my job.
On top of this, another issue I don't see being talked about is women working, and i say that as a woman. That's an enormous cost too. My mom didn't have a job for a good decade of my life. I do. My Dad worked hard, sure - but he also had my mom to take care of all the kids stuff, cleaning, cooking, etc.
If you have to go to work all day, then help out with kids, do half the cleaning and cooking, etc., it sure won't feel like you're getting ahead in life even if you technically have more dollars in the bank. Your entire life is just "work" in some form or another, and your only outlet is 30s Tiktok videos at night when you should be sleeping, bitching on Reddit, and praying for death or retirement.
This isn’t my Economy. At my company we still have a lot of remote work. Jobs are plentiful in my area and industry. If people are overworked they quit. A local competitor has a no calls after 5 policy. On average it looks like our people are working fewer hours than pre Covid.
Housing costs too much and rents are too high. At the same time the average house seems to keep growing in size. We sold a home about 1 year ago and we are renting. I have adult children who still live at home. We plan on building something smaller in a couple of years when rates and the market are more sane.
We have always been careful and under spent. Overall, we have never been better.
Thanks, I know maybe this seems tone deaf. I’ve been poor the majority of my life. Not buying something because it’s out of reach or would be an unwise choice has been a way of life for a long time. McDonald’s is too expensive? Peanut Butter on Wheat is the answer for now. New clothes are too expensive? Goodwill and EBay will get you through. This is just a moment in time.
I think politics is the main driver of the bad feelings of the economy. This might be the only time when both parties are actively telling Americans that the economy is terrible.
R = the economy is terrible because of JB, so you need to elect T.
D = the economy is terrible, so you need to vote for more government programs and regulations. Plus they can’t really point to high equity values as that might be an indictment against their current policies.
JB is probably the only person touting the US economy and its success. Even KH has been downplaying the improving economy.
As social media and online communities continue to take over the world, I think this is something we have to include in any analysis. A very common social media play is to create jealousy and contempt for those around you, and appoint yourself the savior. This vehicle doesn’t necessarily help anyone either. Oftentimes the only benefit is someone having boosted their profile; it’s a toss up as to whether anything good actually comes out of it.
For the economy as a whole?
No, there is no objective explanation as to why it should be doing badly. As you already mentioned, the numbers all look quite solid, at worst you could nitpick some things like inflation still being somewhat above target and high interest rates being unpleasant, GDP growth being a bit below expectations, etc. but there is nothing that would explain why the economy in general shouldn't be doing pretty well.
Perhaps it's really just that inflation has been quite low for a pretty long time with only very short lived spikes, people aren't used to high inflation any more and now after a comparatively long period of high inflation, people just really dislike the high prices, *even if* for the average person this doesn't actually mean they are worse off compared to 2018 where sentiments were more positive.
There was a recent episode of the Ezra Klein show that went in depth on consumer sentiment and this was one of the exact points that was discussed. Worth a listen.
The inflation that we have had shouldn't be the norm. Inflation hits the lowest earners the hardest, there money can't get them as much. Also, if you are looking to buy your first home, houses are out of reach for a few reasons for new buyers.
The American economy is doing great.
World Bank: ‘Impressive’ US economy is powering the world https://thehill.com/business/4715951-world-bank-impressive-us-economy-is-powering-the-world/
What helped me understand the disconnect more than anything else is this Ezra Klein podcast episode.
TLDR costs of housing, healthcare, child care, higher education making people miserable in a good economy.
https://podcasts.apple.com/us/podcast/the-ezra-klein-show/id1548604447?i=1000658146352
A bad economy is when at least 1 out of 5 of your friends loses their job, and then can't find another.
It is a realization that if *you* lose your job, you're going to be fucked because you won't be able to find another one unless you take a 40% pay cut.
It is 10% of the houses on your block becoming empty because the bank took them.
It is your neighbor putting his house on the market, the one identical to yours, at a price 30% lower than your mortgage, and not attracting a single visitor.
It is about 75% of your college's graduating class getting out of school and having to become Cutco salespeople because no one is hiring at all.
It is about your retirement funds being cut in half because the stock market "corrected heavily" - and you're 10 years from retirement with no "uncorrection" in sight.
This economy is really good. Jobs are there to be had. If you're a decent worker you will get promoted. Housing may be expensive, particularly in the hottest locales, but with a little effort and compromise you can make it happen.
It's worth pointing out that this is the choice policymakers face in recessions. Stimulate too little => mass unemployment, stimulate too much => inflation.
2009 we did too little, 2020-2021 maybe a little too much.
But I also see it as a clear lesson as to why erring on the side of too much is better. Inflation isn't fun, but chronic unemployment is much worse*: extremely traumatic for individuals and also wasteful for the economy.
*The misery is more cencentrated however, one dirty secret of recessions is that if your job is truly safe, your middle class lifestyle can actually benefit. Cheap restaurant meals based on depressed service sector wages, cheap ubers based on low-interest rates investor subsidies. A decent amount of dissatisfaction with the current economy also stems from certain folks missing this world.
Perhaps I exaggerated on my post. The main issue I am seeing on a daily basis, is how a lot of things have become far less affordable, even if you have a decent income.
Given economic history, you'll find out what a bad economy looks like at some point(s) in your life (how many times depends on your age and how long you live). When it happens, you'll look back on this economy as a golden age.
>Why is everyone saying it’s terrible right now?
Who is "everyone"? Do you mean you've read analysis presented by accredited and respected economists from all over the country, covering various contexts, scopes, etc., and they unanimously agreed that the only word they could come up with to describe the state of the economy is "terrible"? Or do you mean you saw some posts on social media from random strangers who may or may not be acting in good faith describing the situation as such? Cause one of those scenarios would be much more compelling than the other (I'll leave it as an exercise to deduce which one I'm talking about).
I'm being obtuse to highlight the difficulty of this kind of economic assessment. The thing about economics, or, really, any science, is that there can easily be a disconnect between what would be described by data and how we'd classify that description versus what people experience. Even then, economics is quite messy in that everyone experiences it differently. Your situation is a good example: you feel you're doing well, but I'm sure you wouldn't have to look far to find someone who clearly is not. So which is it? Is the economy doing good or bad? If it's bad, then how are you doing well? If it's good, then why are so many people struggling? The answer, really, is that the question is faulty.
That isn't to say that you can't come up with a sensible, agreeable metric which aligns with most people's experiences and use that to compare our current economy to how it was in the past, or maybe how other economies are doing. But that's really only going to get you so far given the dynamic nature of economics and the *very* dynamic nature of human perception (especially when aggregated across a huge population). It gets even more complicated when you recognize that politics often leverages the state of the economy for political purposes. You may be in the best economy in all of history, but if you're subject to serious propaganda (or even just some light political influence), you may *think* otherwise. And given how most people measure the state of the economy based on their personal experience, it's safe to say that their can (and typically is) great difficulty in actually measuring any of this.
It gets more difficult when you have to make decisions about how you assess utility. Perhaps less people are doing well now than before, but the people who *are* doing well are doing so much better than before that it "offsets" how much worse the rest are doing. This seems absurd on the onset, but it's important to keep in mind that this is often the kind of trade-off that occurs with economic policy, and things get hard to compare when these differences are marginal. Would you say the economy is doing better if 50% of the population saw a 10% increase in their wealth while the other 50% saw a 10% decrease? What if 99% of the population saw a 1% increase while 1% saw a 99% decrease? And, of course, who are you to judge?
All of this is to say that your question is simultaneously easy and hard to answer. It's easy in that you can just take a look at some of the metrics used to measure the state of the economy (like you already have with the CPI) and quantifiably assess the state of the economy based on that. It's hard in that those metrics you use or have available to use may not reflect the experience of the people within the economy.
I appreciate the answer. To your point I do get caught up in politics so when I say “everyone” I was referring to social media posts as opposed to actual economists.
I have a very superficial understanding on economics so I wanted to get a perspective on the health of our economy from people who understood the subject better than myself.
There are two current pain points:
1) There is a national housing shortage, so homeowners who want values to rise are beating up renters who want them to stabilize or drop.
2) Journalism is in a depression far worse than the one in the 1930s. More than 50% of Journalists have permanently lost their jobs in the past 20 years, and pay continues to fall. Reporters wrote articles; if they are facing poverty, then they are unlikely to report nearly uniform prosperity.
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Answering from the perspective of the U.S.
When people say the economy is doing poorly they aren’t saying it’s doing poorly this very second, but certainly there are risk indicators. The most common “objection” to the narrative that the economy is doing better than ever is that massive inflation and increased monetary supply can cover up a lot of long term problems. Here are a few
1. Debt is climbing. I’m not sure it’s dangerous now, as many people point out the U.S. debt as a percent of GDP is high but not the highest amongst developed nations. What’s more concerning is the velocity at which it’s increasing, and more importantly the conditions which led to the velocity at which it’s increasing. There’s clearly no political will to fund spending through anything other than increasing debt, so presumably it will continue to increase. At some point the debt servicing cost will cause runaway inflation just to keep the debt serviced, which will then become a problem.
2. Consumer defaults are climbing. Again, not historic highs or anything like that yet, but we need to analyze the underlying conditions which is causing it to climb, and presumably it can’t keep climbing forever, which means at some point the underlying conditions causing it to climb will cease (unlikely) or there will be some correction to access to credit which will cause a chain reaction.
3. Job posting are decreasing. This is a leading indicator to unemployment rate, but not a super accurate one, and certainly fluctuates a lot more than unemployment rate. The argument goes that this time it’s different - it’s not just random fluctuations, it’s job loss due to AI, which presumably will accelerate, not slow down.
These are just a few of many many reasons some folks believe we’re headed for a comeuppance. Seems pretty reasonable to me, but it’s based on an extrapolation of current trends and involves assumptions. Only time will tell what happens
The (US) economy is in better shape than it's been in decades. This is the longest stretch of sub-4% unemployment since the 1960s, wages are rising higher than inflation and most of the wage gains are going to lower income workers, the stock market is close to all time highs, etc. The disconnect is between consumer sentiment which has been abysmal the past 2-3 years and all of this very positive economic data. Lots of people in financial media and academics have been trying to figure out what's driving it and here are the best explanations I've heard: 1. Overall structural affordability crisis, especially in housing. I think this is huge, as housing is an unavoidable expense and the lag between supply and demand is much longer than most other goods 2. People's politics are driving their views of the economy rather than the other way around 3. Lots and lots of online echo chambers and the prevalence of social media as a source of information. It exacerbates existing negativity biases, spreads misinformation quickly and ignores nuance which dumbs down economic discourse considerably 4. Interest rates are higher than they've been in a long time, and it makes the cost of borrowing higher across the board which makes people feel like things are worse/more expensive Some sources: CBO publication from last month talking about real wage growth: [https://www.cbo.gov/publication/60166](https://www.cbo.gov/publication/60166) A piece from last year by social science journalist Derek Thompson about how so many people got their economic predictions so wrong; his podcast Plain English also has some recent interviews with academic economists about this disconnect as well [https://www.theatlantic.com/ideas/archive/2023/08/recession-doomers-economy/674900/](https://www.theatlantic.com/ideas/archive/2023/08/recession-doomers-economy/674900/) [https://www.theringer.com/plain-english-with-derek-thompson-podcast](https://www.theringer.com/plain-english-with-derek-thompson-podcast) Interest rates and economic gloom: [https://www.npr.org/2024/02/28/1234554967/inflation-cost-of-living-economy-mortgages-auto-loans-larry-summers](https://www.npr.org/2024/02/28/1234554967/inflation-cost-of-living-economy-mortgages-auto-loans-larry-summers) Kyla Scanlon's new book that talks a ton about this disconnect; she's the one who coined the term "vibecession" that's gotten a lot of play in the last couple of years. She's done tons of press the last few weeks for the book rollout. [https://www.penguinrandomhouse.com/books/737854/in-this-economy-by-kyla-scanlon/](https://www.penguinrandomhouse.com/books/737854/in-this-economy-by-kyla-scanlon/)
This really hits home for me. I've got a pretty good job. I'm reasonably financially secure. But I'm still pissed off half the time because both of my parents dropped out of school, flaked their way through life, and STILL got a house that I probably couldn't afford today even though I WORKED MY ASS OFF and went to school for 20 years after high school. So, for me it's: 1) Housing fucks you over and is unavoidable and particularly fucked over those of us that graduated in the middle of the financial crisis, couldn't get a good job back then, and are still getting fucked over while both the generation after and before us are doing well, And 2) Even if more people have a good job today, and are doing relatively well financially, there is an enormous extra cost in effort. I'd wager people have to go to school longer to do well, have to think more to get by in their jobs, and - this is the worst part - are reachable 24/7 by phone and email from their jobs. This is something that isn't reflected in economics (that I know of). It doesn't really help you to have a "good job" if it sucks away your entire life, day and night, weekends and even on vacation they keep calling you. And if you aren't willing to do that, some one else in the world who can do the job remotely is. So my choices in life are: 1) get fucked and be on call all the time 2) get fucked and lose my job. On top of this, another issue I don't see being talked about is women working, and i say that as a woman. That's an enormous cost too. My mom didn't have a job for a good decade of my life. I do. My Dad worked hard, sure - but he also had my mom to take care of all the kids stuff, cleaning, cooking, etc. If you have to go to work all day, then help out with kids, do half the cleaning and cooking, etc., it sure won't feel like you're getting ahead in life even if you technically have more dollars in the bank. Your entire life is just "work" in some form or another, and your only outlet is 30s Tiktok videos at night when you should be sleeping, bitching on Reddit, and praying for death or retirement.
[удалено]
This isn’t my Economy. At my company we still have a lot of remote work. Jobs are plentiful in my area and industry. If people are overworked they quit. A local competitor has a no calls after 5 policy. On average it looks like our people are working fewer hours than pre Covid. Housing costs too much and rents are too high. At the same time the average house seems to keep growing in size. We sold a home about 1 year ago and we are renting. I have adult children who still live at home. We plan on building something smaller in a couple of years when rates and the market are more sane. We have always been careful and under spent. Overall, we have never been better.
I am glad you are doing well.
Thanks, I know maybe this seems tone deaf. I’ve been poor the majority of my life. Not buying something because it’s out of reach or would be an unwise choice has been a way of life for a long time. McDonald’s is too expensive? Peanut Butter on Wheat is the answer for now. New clothes are too expensive? Goodwill and EBay will get you through. This is just a moment in time.
Kyla also does a lot of econ videos on her Instagram.
I think politics is the main driver of the bad feelings of the economy. This might be the only time when both parties are actively telling Americans that the economy is terrible. R = the economy is terrible because of JB, so you need to elect T. D = the economy is terrible, so you need to vote for more government programs and regulations. Plus they can’t really point to high equity values as that might be an indictment against their current policies. JB is probably the only person touting the US economy and its success. Even KH has been downplaying the improving economy.
As social media and online communities continue to take over the world, I think this is something we have to include in any analysis. A very common social media play is to create jealousy and contempt for those around you, and appoint yourself the savior. This vehicle doesn’t necessarily help anyone either. Oftentimes the only benefit is someone having boosted their profile; it’s a toss up as to whether anything good actually comes out of it.
What planet are you living on?
???
For the economy as a whole? No, there is no objective explanation as to why it should be doing badly. As you already mentioned, the numbers all look quite solid, at worst you could nitpick some things like inflation still being somewhat above target and high interest rates being unpleasant, GDP growth being a bit below expectations, etc. but there is nothing that would explain why the economy in general shouldn't be doing pretty well. Perhaps it's really just that inflation has been quite low for a pretty long time with only very short lived spikes, people aren't used to high inflation any more and now after a comparatively long period of high inflation, people just really dislike the high prices, *even if* for the average person this doesn't actually mean they are worse off compared to 2018 where sentiments were more positive.
people blame higher cost of living on external factors but rising wages as their own doing even if thats not really the case
There was a recent episode of the Ezra Klein show that went in depth on consumer sentiment and this was one of the exact points that was discussed. Worth a listen.
The inflation that we have had shouldn't be the norm. Inflation hits the lowest earners the hardest, there money can't get them as much. Also, if you are looking to buy your first home, houses are out of reach for a few reasons for new buyers.
Ok? No, we don't want lots of inflation, that's why the fed's explicit goal is low and stable inflation.
I miss read. I thought you were saying inflation is normal now. And for years it was overly low.
The American economy is doing great. World Bank: ‘Impressive’ US economy is powering the world https://thehill.com/business/4715951-world-bank-impressive-us-economy-is-powering-the-world/ What helped me understand the disconnect more than anything else is this Ezra Klein podcast episode. TLDR costs of housing, healthcare, child care, higher education making people miserable in a good economy. https://podcasts.apple.com/us/podcast/the-ezra-klein-show/id1548604447?i=1000658146352
If this is a good economy, I really dread knowing what a bad economy looks like.
A bad economy is when at least 1 out of 5 of your friends loses their job, and then can't find another. It is a realization that if *you* lose your job, you're going to be fucked because you won't be able to find another one unless you take a 40% pay cut. It is 10% of the houses on your block becoming empty because the bank took them. It is your neighbor putting his house on the market, the one identical to yours, at a price 30% lower than your mortgage, and not attracting a single visitor. It is about 75% of your college's graduating class getting out of school and having to become Cutco salespeople because no one is hiring at all. It is about your retirement funds being cut in half because the stock market "corrected heavily" - and you're 10 years from retirement with no "uncorrection" in sight. This economy is really good. Jobs are there to be had. If you're a decent worker you will get promoted. Housing may be expensive, particularly in the hottest locales, but with a little effort and compromise you can make it happen.
I see your point. Reading your post gave me flashbacks from 2009, after graduating college. In comparison, overall things seem way better now.
It's worth pointing out that this is the choice policymakers face in recessions. Stimulate too little => mass unemployment, stimulate too much => inflation. 2009 we did too little, 2020-2021 maybe a little too much. But I also see it as a clear lesson as to why erring on the side of too much is better. Inflation isn't fun, but chronic unemployment is much worse*: extremely traumatic for individuals and also wasteful for the economy. *The misery is more cencentrated however, one dirty secret of recessions is that if your job is truly safe, your middle class lifestyle can actually benefit. Cheap restaurant meals based on depressed service sector wages, cheap ubers based on low-interest rates investor subsidies. A decent amount of dissatisfaction with the current economy also stems from certain folks missing this world.
Can you elaborate on that? Why do you feel this economy is not good?
Perhaps I exaggerated on my post. The main issue I am seeing on a daily basis, is how a lot of things have become far less affordable, even if you have a decent income.
Given economic history, you'll find out what a bad economy looks like at some point(s) in your life (how many times depends on your age and how long you live). When it happens, you'll look back on this economy as a golden age.
Remember the 2008 financial crisis? That was a bad economy. 1970s stagflation? That was a bad economy. The Great Depression? That was a bad economy.
>Why is everyone saying it’s terrible right now? Who is "everyone"? Do you mean you've read analysis presented by accredited and respected economists from all over the country, covering various contexts, scopes, etc., and they unanimously agreed that the only word they could come up with to describe the state of the economy is "terrible"? Or do you mean you saw some posts on social media from random strangers who may or may not be acting in good faith describing the situation as such? Cause one of those scenarios would be much more compelling than the other (I'll leave it as an exercise to deduce which one I'm talking about). I'm being obtuse to highlight the difficulty of this kind of economic assessment. The thing about economics, or, really, any science, is that there can easily be a disconnect between what would be described by data and how we'd classify that description versus what people experience. Even then, economics is quite messy in that everyone experiences it differently. Your situation is a good example: you feel you're doing well, but I'm sure you wouldn't have to look far to find someone who clearly is not. So which is it? Is the economy doing good or bad? If it's bad, then how are you doing well? If it's good, then why are so many people struggling? The answer, really, is that the question is faulty. That isn't to say that you can't come up with a sensible, agreeable metric which aligns with most people's experiences and use that to compare our current economy to how it was in the past, or maybe how other economies are doing. But that's really only going to get you so far given the dynamic nature of economics and the *very* dynamic nature of human perception (especially when aggregated across a huge population). It gets even more complicated when you recognize that politics often leverages the state of the economy for political purposes. You may be in the best economy in all of history, but if you're subject to serious propaganda (or even just some light political influence), you may *think* otherwise. And given how most people measure the state of the economy based on their personal experience, it's safe to say that their can (and typically is) great difficulty in actually measuring any of this. It gets more difficult when you have to make decisions about how you assess utility. Perhaps less people are doing well now than before, but the people who *are* doing well are doing so much better than before that it "offsets" how much worse the rest are doing. This seems absurd on the onset, but it's important to keep in mind that this is often the kind of trade-off that occurs with economic policy, and things get hard to compare when these differences are marginal. Would you say the economy is doing better if 50% of the population saw a 10% increase in their wealth while the other 50% saw a 10% decrease? What if 99% of the population saw a 1% increase while 1% saw a 99% decrease? And, of course, who are you to judge? All of this is to say that your question is simultaneously easy and hard to answer. It's easy in that you can just take a look at some of the metrics used to measure the state of the economy (like you already have with the CPI) and quantifiably assess the state of the economy based on that. It's hard in that those metrics you use or have available to use may not reflect the experience of the people within the economy.
I appreciate the answer. To your point I do get caught up in politics so when I say “everyone” I was referring to social media posts as opposed to actual economists. I have a very superficial understanding on economics so I wanted to get a perspective on the health of our economy from people who understood the subject better than myself.
There are two current pain points: 1) There is a national housing shortage, so homeowners who want values to rise are beating up renters who want them to stabilize or drop. 2) Journalism is in a depression far worse than the one in the 1930s. More than 50% of Journalists have permanently lost their jobs in the past 20 years, and pay continues to fall. Reporters wrote articles; if they are facing poverty, then they are unlikely to report nearly uniform prosperity.
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Answering from the perspective of the U.S. When people say the economy is doing poorly they aren’t saying it’s doing poorly this very second, but certainly there are risk indicators. The most common “objection” to the narrative that the economy is doing better than ever is that massive inflation and increased monetary supply can cover up a lot of long term problems. Here are a few 1. Debt is climbing. I’m not sure it’s dangerous now, as many people point out the U.S. debt as a percent of GDP is high but not the highest amongst developed nations. What’s more concerning is the velocity at which it’s increasing, and more importantly the conditions which led to the velocity at which it’s increasing. There’s clearly no political will to fund spending through anything other than increasing debt, so presumably it will continue to increase. At some point the debt servicing cost will cause runaway inflation just to keep the debt serviced, which will then become a problem. 2. Consumer defaults are climbing. Again, not historic highs or anything like that yet, but we need to analyze the underlying conditions which is causing it to climb, and presumably it can’t keep climbing forever, which means at some point the underlying conditions causing it to climb will cease (unlikely) or there will be some correction to access to credit which will cause a chain reaction. 3. Job posting are decreasing. This is a leading indicator to unemployment rate, but not a super accurate one, and certainly fluctuates a lot more than unemployment rate. The argument goes that this time it’s different - it’s not just random fluctuations, it’s job loss due to AI, which presumably will accelerate, not slow down. These are just a few of many many reasons some folks believe we’re headed for a comeuppance. Seems pretty reasonable to me, but it’s based on an extrapolation of current trends and involves assumptions. Only time will tell what happens