No. of Recommendations: 3
Oddly, surveys have consistently shown most Americans feeling pretty good about their own financial situation. But they insisted that bad things were happening to the economy — that is, other people. The commentator Kyla Scanlon coined the term
“vibecession,” now widely used to mean a situation in which negative views about the economy don’t seem to match up with the data.But the vibecession may be coming to an end. The Michigan index has soared over the past two months, while expected inflation has plunged. Suddenly, Americans are sounding more positive about the economy.
It’s true that overall consumer sentiment still looks weaker than it did in late 2019, when both unemployment and inflation were similar to their current levels. But much, maybe most of this gap reflects partisanship. Supporters of both parties tend to have negative economic views when the other party holds the White House, but the effect is much stronger for Republicans. According to the Michigan survey,
Republicans, on average, consider current economic conditions roughly as bad now as they were in June 1980, when inflation was over 14 percent and unemployment was over 7 percent.From a political point of view, what this means is that overall consumer sentiment is being held down largely by people who would never consider voting for Biden in any case. What matters are the perceptions of persuadable voters and Democrats who might have stayed home in the face of a bad economy. And these perceptions are almost surely moving in Biden’s direction.If the vibecession is ending, why? One answer is that good news takes time to filter into public perceptions. I mean, even some professional economists haven’t caught up and are still talking about stubbornly high inflation; we shouldn’t have expected everyday people’s perceptions to turn on a dime.
Beyond that, I suspect that economic perceptions are being influenced by the stock market, which has recently reached record highs. The truth is that the market is a very bad guide to the economy’s future, but it’s highly visible. Furthermore, it influences the tone of news coverage of the economy, which has been very negative under Biden but may be improving.
Will economic perceptions actually end up being a plus for Biden? Probably not. But if Trump was counting on perceptions of a bad economy to hand him victory, reality seems disinclined to cooperate. - Krugman
https://www.nytimes.com/2024/01/22/opinion/biden-t...The Michigan Index: (Sorry, can't remember how the colon works) :)
Preliminary Results for January 2024
....................................................:Jan :Dec :Jan :M-M :Y-Y
....................................................:2024 :2023 :2023 :Change :Change
Index of Consumer Sentiment.....:78.8 :69.7 :64.9 :+13.1%.. :+21.4%
Current Economic Conditions.....:83.3 :73.3 :68.5 :+13.6%.. :+21.6%
Index of Consumer Expectations..:75.9 :67.4 :62.6 :+12.6%.. :+21.2%
http://www.sca.isr.umich.edu/ 