One of the privileges afforded bloggers is the right to go off on a rant every so often, so here is one from me! According to a CNN poll, 51% of Americans believe the economy is getting worse and a recent AP-NORC survey found that 85% believe that America is on the wrong track. I will let others opine on societal issues, but consider the following economic statistics:
• At 3.8%, the unemployment rate is near an all-time low.
• The economy is 23% larger than it was immediately prior to Covid.
• The price of the median home is 43% above the pre-Covid level and 65.8% of Americans own a home.
• Household net worth is 32% above the pre-Covid level.
• Inflation has fallen from 9.1% to 3.7%. Admittedly, it has not reached the FED’s target of 2% but it is line with the long-term average.
• Even with a bout of rising prices, personal income adjusted for inflation is 4% above the pre-Covid level.
• Despite a quadrupling in the amount of outstanding consumer debt over the last thirty years, consumer debt payments as a percent of income is in line with the long-term average.
• Savers are now earning more than 5% on short term investments.
• The stock market is within 10% of its all-time high.
Folks, the economy is always characterized by plusses and minuses, so this is about as good as it gets.
What is the disconnect? Email me at email@example.com with your suggestion! For whatever it is worth, I offer two possible explanations. First, our totally dysfunctional political system promotes division and a constant sense of unease. Second, whereas previous generations were only aware of the status of their neighbors who were similar to them, social media now allows everyone to view the lifestyles of the super-wealthy creating a sense of envy and anger. My favorite financial writer, Morgan Housel, has said “it used to be about keeping up with the Joneses, now it is about keeping up with the Kardashians.”