Statistically Good Economy but Americans Feel Bad!! Why?

The U.S. economy has been recovering from the pandemic, with low unemployment, high growth, and moderate inflation.

But many Americans are not feeling the benefits of this recovery. They are worried about the rising cost of living, the increasing debt, and the uncertain future.

In this blogpost, we will explore some of the reasons why Americans feel bad about the economy despite good statistics.

>>Read more on Why Biden’s approval Plummet.

US economy: Inflation is Still a Major Concern

One of the main reasons why Americans feel bad about the economy is inflation.

>>When the prices of goods and services, in general, gets increased over time then it is called inflation.

It erodes the purchasing power of money and reduces the real value of income and savings.

Other factors that contribute to inflation are housing costs, utility bills, and gas prices.

Inflation affects everyone, but especially those with low and fixed incomes. They have less flexibility to adjust their spending and saving patterns to cope with higher prices.

They also have less access to credit and financial services that can help them manage their finances.

Debt is Piling Up for Many Households

Another reason why Americans feel bad about the economy is debt.

What is Debt? >> It is the amount of money that one owes to another party, such as a bank, a credit card company, or a government agency.

Is Debt useful? >> It can be useful for financing investments, education, or emergencies, but it can also become a burden if it exceeds one’s ability to repay.

According to the poll conducted by Suffolk univeristy at Boston and USA Today, 39% of Americans said that their household debt has increased over the past year, while only 18% said that it has decreased.

Many people have had to borrow money to pay for their bills, medical expenses, or other needs during the pandemic.

Some have also taken advantage of low interest rates to refinance their mortgages or buy new homes. However, debt can also create stress and anxiety for many households.

They have to worry about making monthly payments, paying interest charges, and avoiding penalties or defaults. They also have less money available for saving or investing for their future goals.

Stimulus Money is Running Out for Many Families

A third reason why Americans feel bad about the economy is the end of stimulus money.

Stimulus money is the financial assistance that the federal government provides to individuals, businesses, or other entities to boost economic activity and mitigate the effects of a crisis.

Stimulus money can take various forms, such as direct payments, tax credits, unemployment benefits, or loans.

According to the same poll, 55% of Americans said that they received some federal stimulus money or other federal aid during the pandemic.

For many of them, this money was very important for getting through the worst of the time of covid. It helped them pay for their rent, food, utilities, or other essentials.

However, most of the stimulus money has already been distributed and spent by now.

Congress has rejected proposals to renew some of the programs that provided extra help to families during the pandemic, such as expanded child tax credits or childcare subsidies.

This means that many families will have less income and more expenses in the coming months.

Spending Habits Have Changed Due to Economic Anxiety

Another reason why Americans feel bad about the economy is the change in their spending habits.

What are Spending habits? >>These are the patterns or behaviors that people follow when they buy goods or services. Spending habits reflect people’s preferences, needs, values, and emotions.

More than half are spending less on groceries and trying to save on electricity costs by dialing back their home thermometers as per the Poll.

These changes in spending habits can have both positive and negative effects on people’s well-being. On one hand, they can help people save money and avoid unnecessary debt.

On the other hand, they can also reduce people’s enjoyment and satisfaction with life. They can also hurt businesses that rely on consumer spending for their revenues and profits.

Conclusion

The U.S. economy may look good on paper, but many Americans are not feeling good about it in reality. They are facing challenges such as inflation, debt, and lack of stimulus money that affect their financial security and quality of life.

They are also changing their spending habits to cope with these challenges, which can have mixed impacts on their well-being and on other sectors of the economy.

The gap between economic statistics and economic sentiment is not new or unique to this period. It reflects different perspectives, experiences, and expectations of different groups of people.

However, it is important to understand and address this gap, as it can have significant implications for the future of the economy and society.