Why Americans feel gloomy about the economy despite falling inflation and low unemployment

Bloody well hate the neoliberals. One was arguing with me on reddit that because people in Kenya are better off, compared to the 80s, I should stop complaining.

Like ok I am happy for the people of Kenya. I got nothing against them. So yeah good job. Now can my healthcare costs please go down? Because I am pretty confident that they can and the people of Kenya can also be doing well. One really doesn't impact the other that much.

I love that they chose a term to further muddy the waters between conservatives and liberals.

I hear neoliberal and I think, “huh, is the a new liberal?” Nope. It’s the exact fucking opposite.

Fuck neoliberalism. Glad I found out what it was. It really highlights everything that is wrong with the American economy.

No kids to take care of, but my fridge just went out today. This spoiled most of the food in the fridge as I can't pick up a new one until tomorrow, and the of a new fridge and restocking my fridge pretty much cancels Xmas gifts for the family. I feel bad every year because they get my wife and I all kinds of cool stuff and it seems like every year I'm stuck telling them, "Maybe I'll be less broke next year" Not quite the same, I know, but it still makes me feel aweful...

Meanwhile the owner of my company just bought a 5th wheel camper trailer and hitch for his truck in June because he felt like going camping, and is having a 6 bedroom house built for his son on his ranch because his sons wife is having a baby.

This world is fucked for the working class truly.

Dang, I was just thinking about how my mom got a raise years ago when I was still a kid and it practically changed our life. All of a sudden we were eating out more. All of a sudden we had nicer things. All of a sudden my mom wasn't stressed anymore.

It's sad to see how people are now experiencing the opposite of that. It's sad they're experiencing that when, in absolute terms, we are more productive than ever.

Greed really is the worst thing we face as a species in the modern age. It's a shame so many people are gung-ho about supporting it.

The disparity in wealth needs to shrink instead of grow. Otherwise, these problems will only get worse over time.

I can't believe how expensive thanksgiving shopping was this year. I hit nearly 200 dollars.

I really like that car crash analogy or whatever you want to call it. It isn't like sudden positive changes in inflation or job numbers magically fixes QOL for people overnight. It can take weeks...months, maybe even years (maybe even never?)

Checks out. Not a huge change but a definite trend.

Source: https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm

Corporate profits <- your wallet

For what it's worth gas has come down quite a bit the last few weeks.

Rent is going to go up as long as it's able.

As soon as people have more money to spend, landlords increase rent.

Renting is one of the biggest scams this generation has convinced itself into falling for.

Median figures are more accurate and scarier than average.

Wages are now out pacing inflation. So it sounds like you're saying your gloomy about the economy because the president hasnt come in and forced your boss to give you a raise, or hand you a different job with more pay.

Because interest rates are insane trapping people in homes they no longer want but can’t afford to leave?

I'm in this comment and I don't like it.

Interest rates should never have been that low to begin with. It was basically free money for the wealthy, and it's how housing became such an investment for big businesses. The rates we have now are still at historic lows, they just feel high compared to the bonkers low rates of the last couple decades. I understand the frustration 100%, but lowering the rates again is NOT the answer at all.

I agree, but we gotta be more thoughtful about it.

I recently had a crazy interaction where I was apparently "The Rich" that needs eaten because I landed a job with a good salary.

Working people aren't the enemy, needs to be made clear as well. Hell, even corporate headwigs raking in a few million aren't even close to your enemy in this regard either.

Not to leave out unemployment has run out for thousands, making the numbers look good.

You don't actually want that. It encourages people to "invest" by sticking hard cash in a mattress. It rewards people for doing absolutely nothing but taking money out of the economy.

Ideal (if we're keeping a monetary exchange society, anyway) is low (<3%), predictable inflation combined with wages increasing in proportion to productivity. We had a period of relatively low inflation followed by a giant spike, plus wage gains that are nowhere near matching productivity gains over the last 50 years, and that's where things hurt. Capitalism doesn't seem capable of this, however, as it's always chasing the next hype cycle that leads to these spikes and lulls.

Deflation means stagnation or crash in economic terms

What you are describing is deflation and it's only happened twice during the history of the United States. It is also generally looked at as a bad thing.

Japan has been struggling with deflation (=decrease of prices) for a good 25 years now... you really don't want that happening. Ideally you want something around 2% inflation.

Deflation is a death spiral. China is going through it rn. The currency gets stronger, but then people wait to buy stuff like houses because it will be cheaper in a few months. It creates a snowball effect as people all start holding off on buying and selling stuff, wanting the best deal possible, or then being unable to buy things if people hold off on selling.

I can... but I was born in the 70s

He’s not counted in the unemployment numbers because he hasn’t filed for benefits.

That's untrue. From the U.S. Bureau of Labor Statistics:

In the Current Population Survey, people are classified as unemployed if they meet all of the following criteria:

• They were not employed during the survey reference week.
• They were available for work during the survey reference week, except for temporary illness.
• They made at least one specific, active effort to find a job during the 4-week period ending with the survey reference week (see active job search methods) OR they were temporarily laid off and expecting to be recalled to their job.

There are other statistics measuring unemployment claims, but when you hear, "the unemployment rate for Oct 2023 is 3.9%", that is unrelated to benefits.

IMO it's the inverse, we don't make enough. The 1% have been keeping wages stagnant. We can't stop the price of goods from going up, but we can increase pay from it sharing the bottom line. As soon as interest rates re-appeared, all the free money that was sitting around for the taking disappeared. Sooner than later, we'll be paying micro-transactions for crap that was previously able to be paid for by selling us ads. But that money isn't coming back to us.

It is difficult to get a man to understand something when his salary depends on his not understanding it.

• Upton Sinclair, 1934

Part of what's happening on this front (things are expensive) is antitrust-related.

Mergers and Acquisitions among competing companies, and 'vertical integration' along supply chains (both of which ought to get a lot more antitrust attention than they have for a long time) often means the resulting companies control supply enough that they can throttle supply and look, there's not enough of the things! Prices then go up- and the loss in productive capacity that happens when competing firms consume each other is behind those mysterious 'supply chain issues' that led to empty shelves during the pandemic.

The election wave immediately following Watergate swept a lot of then-young, centrist Democrats into the halls of congress- and in so doing, also retired the Democrats' institutional interest in anti-monopoly enforcement. Since then, neglecting antitrust enforcement on boring things like commodities and pharmaceuticals has been a bipartisan affair.

I'll take a stab. This is all conjecture though so pinch of salt, yada yada. Basically, it's a mix of two or three things.

First, after record breaking inflation in the U.S., the real price of goods/luxuries went up. If everyone bought the exact same thing they bought on black friday last year, we would still have spent more money this year. If you account for our absurd annual inflation this year, "up 7.5%" does not sound very impressive at all.

Second, the economy and general luxury shopping are not necessarily positively correlated. For example, I feel really gloomy about the prospect of ever owning a home. Since I'm just renting, I have more disposable income for luxury shopping. The same could be true for any large purchases like cars, moving out of state, starting businesses, etc. We aren't reinvesting our money in our economic systems as heavily so it follows that we have more spending cash (not a lot more, but I would certainly have less if I had a mortgage right now).

Third, budgetary reasons. If people do have less money then it follows that a spur of the moment purchase like a new TV would not be made so hastily throughout the year. Or even specifically held off on until the annual sale. It could be that we didn't get our usual luxuries and are compensating by getting them at a discounted price. It may also just be emotional spending on ourselves, which many people do as a response to feeling 'gloomy' in a consumer-first culture, despite that actively making the problem worse.

People who feel bad buy things to feel better. They might not be able to afford a new house or a car or medical care, but they’ll spend something on gifts.

Also, maybe it’s members of the owning class buying things. They’re getting more money all the time, whether the economy does “good” or not. So they’ve always got money to blow on shit.

You can buy a tv for cheaper than a loaf of bread.

Sure, no problem. Spending rose by 7.5%, inflation until recent months was at 10%. Net real sales is down by 3.5%. People are spending more for less. This is why we are gloomy. Still, I recognize things are getting better on the macro level.

I'm in a similar boat. Had to float on credit for months. When I eventually manage to get a job it means I'll be able to start digging myself out of a hole. Forget about being ahead.

Yeah, even utility bills are through the roof. I just got my October gas bill in the new house I'm renting, $150. I'm nervous to see what that's going to be in January, it's already cold and the furnace has been cranking.

Dang, it must be rough living on peanut butter and jelly sandwiches.

25ct for 3 decent potatoes at my town.

SACK of 50 pounds for 12$ Wanna start a business?

It also kinda glances over the fact that the boost of inflation is there permanently and this is the new baseline, and no wages have kept up to it at all while everyone is getting nickel and dimed to death.

It also kinda glances over the fact that the boost of inflation is there permanently and this is the new baseline, and no wages have kept up to it at all while everyone is getting nickel and dimed to death.

I don't get this argument. If everything is greedily overpriced why not just go into business for yourself? Like if eggs are so overpriced, go buy chickens and start selling eggs. Prices will go down. Complaining about greed or expecting the government to do something won't help anything. That's the real reason Americans feel gloomy, they keep expecting someone else to do something, like the government or c-level executives.

I don’t get this argument. If everything is greedily overpriced why not just go into business for yourself? Like if eggs are so overpriced, go buy chickens and start selling eggs. Prices will go down. Complaining about greed or expecting the government to do something won’t help anything. That’s the real reason Americans feel gloomy, they keep expecting someone else to do something, like the government or c-level executives.