Why do so many Americans think we're in a RECESSION?

Question

According to a recent Harris poll published by the Guardian.

Among the 2,000+ participants in the survey:

* 56% think the US is currently experiencing a recession, and 55% believe the economy is shrinking. (GDP—a key measure of economic activity—is growing.)
* 72% believe inflation is going up. (It’s more than halved from a 2022 peak of 9.1% and is hovering between 3% and 4%.)
* 49% think the current unemployment rate is at a 50-year high. (It’s near a 50-year low.)
* 49% believe the S&P 500 is on the decline. (It’s risen more than 12% this year, and Wall Street is raising its expectations for the index’s year-end performance. The Dow also just made record gains.)

So, why do you think so many Americans think we're in a recession... when we are not?

Updates

+1 y

Thanks for everyone's input. Bottom line is that, though the US is technically not in an economic recession, the way economists define it, the average person is struggling, and that is more important than the textbook definition of recession.

As a general rule, perception is more important than fact... and this is an excellent example of that.

goaded · Accepted Answer

"In 2016, the U. S. goods trade deficit with the China was near $350 billion. In the first three years of the Trump administration (before COVID-19), it worsened, averaging almost $379 billion per year. Under Biden, America’s trade deficit with China has improved dramatically — falling by $103 billion, or 27 percent, to $279 billion. It’s the lowest bilateral deficit in goods since 2010. The Trump and George W. Bush tax cuts have added $10 trillion to the debt since their enactment and are responsible for 57 percent of the increase in the debt ratio since 2001. They’re responsible for more than 90 percent of the increase in the debt ratio if the one-time costs of bills responding to COVID and the Great Recession are excluded. Under Biden, the national debt has grown at a far slower pace. Under Trump, the number of Americans lacking health insurance rose by 3 million. Under Biden, it’s been just the opposite. Enrollment in Obamacare has surged from 12 million in 2021 to 21.3 million today. To address consumer prices, the American Rescue Plan (ARP) and the Inflation Reduction Act (IRA) signed by President Biden expanded and extended the refundable tax credits that help Americans purchase health insurance. Meanwhile, the actual prices of goods and services is lower today than it was four years ago under Trump, according to the nonpartisan Congressional Budget Office. That’s because incomes have grown faster than prices over that four-year period. Spending on new factories has almost tripled over the past three years, as companies rush to locate in the U. S. market. Construction employment in April hit an all-time high of 8.2 million workers. The CHIPs Act is creating large numbers of manufacturing jobs. It also activates the Davis Bacon Act, requiring that contractors and subcontractors pay the prevailing wage. It commits companies receiving grants to allow workers to unionize. It builds new plants in areas that have suffered job losses and decline. And it commits companies getting grants to include daycare facilities in their new plants."

WindAtMyBack · Accepted Answer

I think multiple reasons.

1) The polls themselves are highly questionable. They are even more questionable now that most of that stuff is done online.

2) People often have no idea about that stuff. A significant number don't know what some of that stuff is. A much larger number don't know how those things are actually measured.

3) People tend to notice negative things, or things that directly impact them more than positive things or things that don't affect them.

4) Many of those static numbers have very little meaning. They have more meaning when changes over time are considered.

5) Averages for an entire nation with 340 million people can be very different than it is for individuals.

The DOW and S&P don't mean shit to an individual, unless they happen to have a DOW or S&P index fund, or other investment that trends with the DOW or S&P.

Same with inflation rate. There are several Consumer Price Indexes. For example the CPI used for my Social Security cost of living increases is the CPI-W, which is supposed to measure the types of things a Working Class person buys. When I look closely at how it's determined, it's easy to see it does not reflect my own personal cost of living increases. My personal inflation rate is much higher due to my housing costs being a much higher proportion of my total expenses (mainly due to extremely high property tax where I live).

Those aggregate numbers don't mean a thing to the average person. People go by feeling. Do they feel like they are doing well? Or do they feel like they are struggling more?

They also judge things by their own little neck of the woods, and their own circle of friends. If everyone says the economy is bad, then people believe it really is bad. This is why the media can actually create a recession, like they did in the 1992 presidential election. You keep saying it enough, and people not only believe it, but it actually becomes true - basically a self fulfilling prophecy.

sage2021 · Accepted Answer

Because most people don't look at all the things you are going by.

Everyday people look at the total on their grocery bag ll, electric bill, and gasoline bill in real time.

You know as well as I do that the stock market can crash at any time like it has before.

The world needs the figure's you showed for their One Word Order.

Plus you ice cream joe needs those figures to be high so he will get re-elected. Do you think anyone would vote for him if we were in a bad ression come election day? It's all rigged with the help from other countries.

Sure a lot of other countries are doing well because they unloaded most of their population and sent them over here for America 🇺🇸 to pay for them.

They unloaded all their jails and prisons that were costing them a lot of money to pay to house, feed them, clothe them, pay for their medical, etc., so they have money now.

Venezuela claims their crime rate went down 76% after they sent all of their criminals to America 🇺🇸. While America's crime rates have skyrocketed. Gee, I wonder why?

It's all part of the plan for America to be part of the One World Order.
I don't look at the figure's you gave us, and most average Americans don't either. It's the people that have money to invest, not most people. And those figures can change in a heartbeat if even one tragedy happens - like some hackers hacking into our power grid and leaving America 🇺🇸 in the pitch black. No electricity, no lights no phones, just a bunch of people going out of their minds without a way to fix it and that's if they can fix it.

People such as yourself probably don't think ahead about what might very well happen in the not so distant future.

To answer your question they think we are in a recession because they hear Americans can't afford groceries anymtand have run up their credit cards to buy food and gas and utilities. People are using their retirement money to buy food, etc. And those are the facts!!!

Anonymous · Accepted Answer

Because for them, we ARE in a recession. When the purchasing power of wages declines (which is not merely a CPI statistic, and excludes food and energy) individuals must buy less or take on debt. The quality of life declines. To anyone in that situation, they are in an economic recession. It ain’t about statistics, it’s about real life, and MANY people feel this way.

Inflation by definition means that prices are going up and the value of the currency is declining. If inflation goes down it does NOT mean that prices are going down. Quite the opposite. If inflation one year is 10%, what cost me $100 at the beginning of the year will now cost $110. In the next year, if inflation is 5%, those same goods will cost $115. Why would anyone be happy about that? Yet, by your logic, inflation came down 50%. That’s manipulation and no one buys it anymore.

The low unemployment rate is being sustained by government jobs, and part-time jobs being filled by new entrants in the job market. There are few productivity gains and businesses are finding it difficult to maintain top and bottom-line growth. So as sales slip, production must be shifted, quality reduced, product content altered, and expenses squeezed. That comes in the form of layoffs of full-time employees who are replaced by the part-timers mentioned above. Unfortunately, the worst is yet to come.

The stock market has indeed risen but that doesn’t put food on the table for most Americans. That’s out of touch. Also, it’s risen based upon the expectation of interest rate cuts. The Fed is now reluctant to cut rates because inflation still remains significantly above target levels. Also, inflation is likely to worsen because the government continues to pump money into the economy. Monetary policy has limitations when fiscal policy is out of control. If inflation does not come down, the Fed will not cut, and the stock market will give up its gains.

Lynx122 · Answer

Because the economy is not doing as well as it's stated in the numbers The growth is only coming from the top 6 companies the rest of the economy is stagnant. And people easily confuse inflation and prices going up. So prices went up by 9 % and now they're going up by 3-4% they're still going up on top of the previous rise. The goal is between 0-2% so inflation has been above that since 2021. They also try and fiddle with the employment numbers by giving people part time jobs that don't support them just so they can claim one less unemployed person. I'm not saying everything is bad but it's very understandable that people are not feeling the same way as the data suggests.

I did a poll on here and most people expected the next big global recession to happen in the next 5 years and I understand why. I'm not sure about anything anymore because governments are doing so much with debt and lowering interest rates to fake growth but at some point the road has to run out. I personally believe more in being conservative with interest rates and debt but it doesn't seem popular in todays world anymore. We'll see what happens.

patois · Answer

This is the United States GDP growth rate change by quarter for past 3 years. Clearly economic growth has slowed more often than it has improved during the Biden residency.

Inflation rate for the same time period. Fed robber barons that silently tax the public consider 2% inflation to be a health economy. Real people consider 0% inflation to be a healthy economy. Clearly the numbers are exceeding both groups expectations.

That inflation is felt in rising housing expenses due to increased fed rates and 30 year mortgage rates which are a direct result of economic policy.

through food inflation which impacts American families directly.

and gasoline prices.

As a result consumers have less discretionary income... They are working just to survive, not to thrive. They are faced with repetitive supply line shortages which give the impression that businesses are struggling to produce product and fulfill the needs of the population. Average people are becoming poorer because the currency is being devalued which is leading to reduced purchasing power and lower quality of life.

RetroReviews · Answer

The numbers and the polls can be skewed ok but Americans are feeling it in their bank account. Simple eye test. $100 spent at the grocery store now you bring home significant less amount of food than you did before, also putting petrol in your car at the refueling station $10 get you less gallons of fuel then it did before. So the bottom line we are getting less bang for every Buck we spend. So let's say you wanted 10 gallons of petrol. Before you would pay $20 now you pay $35 for the same 10 gallons. Simple math. I used to get chicken wings at a pizza place nearby before I would get 10 wings and it was $10 now if I want those same 10 wings it cost me $15 do you see the difference?

exitseven · Answer

I work in IT and I have a good job. However I know many that a year later are still looking. I see people lower their expectations and are interviewing for jobs that they are over qualified for because their benefits have run out. I suppose its true that there are plenty of jobs out there but they are all low paying service industry jobs. Try paying your bills on that. The classical definition of a recession is a fall in GDP for two quarters in a row. We have already had that last year. Instead of trying to fix it the democrats just changed the definition of what a recession is

MisterWack · Answer

Honestly it puzzles me too, maybe it is because Americans don’t feel like it is that way especially when news articles / news channels grab viewers attention by telling them, “Top analyst predicts recession in next 4 - 9 months”. Store shelves are filled with 3 for 1 deals, ‘new mini versions’, and smaller bottles. Shrinkflation is due to corporate greed, not a downturn and gas prices going up could be attributed to Middle East conflicts since the place is always playing tribalism attacking somebody causing gas shortages to happen. The fact is when gas prices were high, they were actually pretty much higher in Canada & continent of Europe so it isn’t as simple as “American president caused this” when you take that into consideration. We are reactionary and we don’t like to think, we like to feel then apply that to everything clouding our judgment.

MicahRaine · Answer

Because the average annual salary of a middle class worker isn't enough for the down-payment on a house

Because everything is getting much more expensive

Because so many people need multiple jobs just to barely scrape by

Because companies aren't allowing employees to work overtime and make more money

Because most people need a college degree to get a decent job

Because you have to get in debt to go to college

Because college degrees aren't worth anything anymore due to too many people with college degrees

Because now you can't make more money by just working more

Because childcare is now 4k a month

Because renting anywhere costs a fortune

Because we ARE in a recession.

purplepoppy · Answer

One simple answer, America is polarised. Whoever is in power and no matter how things are, half of America will claim it's never been so bad.

Another pointer is just because the country as a whole is doing well it doesn't mean it's going well in your neighbourhood. If a 1000 lose their full time jobs in one town but 5000 people gain a part time job elsewhere then employment has shot up. I think America is a bit like the UK in that politicians are biased towards certain Arras.

Sasquach · Answer

Wallstreet is undoubtedly doing great. However mainstreet is suffering. When people have to choose between putting food on the table and paying record high mortgages/rent you will have a very pessimistic outlook toward the economy.

Also the job numbers are a lie. Many companies are not actually hiring, but rather opening up a job to collect a database of talent. Not to mention the idea of cutting jobs to lower expenses or pushing local jobs to India are exasperating the feeling of being in a recession.

Oh also a starter home will cost you >1 million now days (wages are still mostly stagnant)

Can't afford food or rent with no good paying jobs = we are in a recession

FreyaRed · Answer

Because people don't care about share markets and statistics. You can't feed your family with high statistical GDP per capita. What matters is *real income, that falls steady since 1970

*real income = how much food, fuel, energy and other resources necessary to survive you can buy with average income.

Lliam · Answer

The indication of a healthy economy is based on how far the average person's dollar goes, not how on much the wealth of billionaires increases.

Have you been shopping lately?
Have you seen the increasing number of homeless?
Have you seen the deterioration of cities?
What about the crime rate?
What about all the business closures?

Oh, but the people who own private jets are doing great!

NaultD · Answer

The stock market doesn't help you pay the bills. Today's market may help you in a few decades, but in the here and now, it's questionable whether you'll survive long enough to see that retirement payout if you got one.

Reaganomics is a scam on the average person. Don't piss on my head and call it rain.

dustybiker2 · Answer

When the price of eggs jump $2 and sparklets 5 gallon water bottles too in year went from $5.99-$8.99. Yes. It hit the fan last year. The cost of basic essentials shouldn't be allowed to gouge like this. I feel for the elderly and veterans on disability living, that does not adjust accordingly.

normalice · Answer

Right wing media doesn't want people to know Biden's policies of  not  giving more money to the rich is working out just fine.

OlderAndWiser · Answer

Figures lie and liars figure.

chrissykerdock · Answer

because everything at the grocery store has gone up gas is 4 a gallon nice try biden lover

jamesgoldman · Answer

Most people think reduced inflation means prices dropping as opposed to prices rising slower than they were

If people view the economy as bad and the price of gold/silver/platinum are good it does me good so I'm not complaining

ArrowheadSW · Answer

Yeah I heard about that survey. I don't know where they got the idea that we are in a bad economy. And unemployment is low. Last I heard it was around 3.9% which is considered to be very low.

gorydetails · Answer

Probably most people consider "things are bad for me" as recession. The shitlibs will blame the GOP - oh look - there's one now - but the bottom line is people are greatly suffering from inflation. Caused by Biden's policies.

katiesmuff · Answer

Because housing, food, everything has gone up so much in the last two years and the paychecks haven't followed suit in the majority of cases!

Goahead76 · Answer

Most people I talk to are barely scraping by, the rest of the stuff listed is irrelevant to the average person.

jahaims · Answer

They fudge the numbers. For example they stopped counting people not looking for work as unemployed.

Sevenpointfive · Answer

i don't need a recession board of experts that get paid by the government to tell me i'm in a recession

Rami_NL · Answer

Troubles in paradise? Too much money spent for ukraine and israel

Rangers · Answer

Because inflation is so high, and wages are going down at the same time. Our standard of living is taking a nose dive

Astarlessnightsky · Answer

I guess its because corporate greed keeps prices high, salaries low and housing unaffordable.

Anonymous · Answer

"... published by the Guardian". Right, because they're not radically left-wing  at all . (eyeroll)

KrakenAttackin · Answer

Americans are (correctly) responding to the inflation. Yes, this is not a recession but most folks don't know the technicalities  All the average person knows is they are struggling..

DrPepper12 · Answer

I) Americans are low IQ voters who love themselves some mis/dis information 2) see number two

Deserter2 · Answer

Nobody cares about your models. The price of food, rent, and other goods has increased and wages have remained stagnant. Hence inflation, what is so hard to understand?

Juxtapose · Answer

Because essentially every few years people are getting their income halved by inflation.

Filthy_Immigrant · Answer

cause they dont want to admit how fucked up our country is thanks to Biden trying to be a fucking Santa Clause

OtterMan68 · Answer

because the GOP is repeating it over and over and over

NathanDavis · Answer

they don't understand recession

rosemilk · Answer

because most of us have seen this before

FuqUFggt · Answer

Because costs are up, wages are down, house hold debt is up, GDP is down.

RedInnocent69 · Answer

They’re not very bright.

Why do so many Americans think we're in a RECESSION?

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