Majority of Americans wrongly believe US is in recession – and most blame Biden

🌈 Abstract

The article discusses the widespread misconception among Americans about the state of the US economy, with a majority believing the country is in a recession despite economic data showing growth. The article examines the factors contributing to this disconnect between perception and reality, including the impact of inflation, the Biden administration's handling of the economy, and the influence of political affiliation on economic outlook.

🙋 Q&A

[01] Misconceptions about the Economy

1. What are the key misconceptions that Americans have about the economy?

• 55% believe the economy is shrinking, and 56% think the US is experiencing a recession, despite GDP growth
• 49% believe the S&P 500 stock market index is down for the year, when it has actually increased by 24% in 2023 and is up over 12% this year
• 49% believe unemployment is at a 50-year high, when it is actually at a near 50-year low of under 4%

2. What is the role of the Biden administration in these misconceptions?

• 58% of those polled believe the economy is worsening due to mismanagement by the Biden administration

3. How do Americans' perceptions of inflation differ from the actual data?

• 72% of respondents think inflation is increasing, when in reality, the inflation rate has fallen sharply from its peak of 9.1% and has been fluctuating between 3% and 4% a year
• The inflation rate went down from 3.5% to 3.4% in April 2023, triggering a stock market rally

[02] Factors Contributing to Economic Pessimism

1. How do the economic data and the emotional reality of Americans differ?

• Economic data, such as GDP growth and low unemployment, suggest the economy is doing well, but there is a "stubborn gap" between this data and the widespread pessimism among Americans about the economy
• 55% of respondents think the economy is only getting worse

2. What is the concept of "vibecession" and how does it relate to the current economic situation?

• "Vibecession" is a term coined to describe the widespread pessimism about the economy that defies the statistics showing the economy is actually doing well
• This phenomenon is attributed to the lingering effects of high inflation and interest rates, even though they have eased considerably from their peaks

3. How do political affiliations influence perceptions of the economy?

• Republicans were much more likely to report feeling down about the economy than Democrats
• The vast majority of Republicans believe the economy is shrinking, inflation is increasing, and the economy is getting worse overall, while less than 40% of Democrats believed the same
• More Republicans than Democrats believe the economy is worsening due to the Biden administration's mismanagement

4. What is the impact of the economic situation on Biden's re-election bid?

• The economy continues to present a major challenge for Biden, with 70% of Republicans and 39% of Democrats believing he is making the economy worse
• However, there are some signs of optimism, with a slight increase in the number of Republicans who believe "Bidenomics" will have a positive lasting impact

[03] Public Trust and the Way Forward

1. How do Americans view the credibility of economic news and information?

• In both September and May, a majority of respondents (more than 60%) indicated skepticism over economic news

2. What is the key challenge for Biden and other leaders in addressing the public's economic concerns?

• "What Americans are saying in this data is: 'Economists may say things are getting better, but we're not feeling it where I live,'" according to the CEO of the Harris Poll
• Unwinding the uncertainty and restoring public confidence in the economy will be an "uphill battle" for Biden and other leaders, who need to "bring the public along" and understand the disconnect between the data and the emotional reality.