What is the main issue facing the Americans economy at the moment? The energy is off.

By practically every objective metric, Americans are doing substantially better economically than they were when President Joe Biden took office nearly three years ago. However, a majority (58%) believes that Biden’s policies have worsened the economy.

Contrary to the hard numbers, which show an economy brimming with optimism, the gloomy forecast seems incongruous.

Americans

Firstly, at the beginning of Biden’s administration, in January 2021, “everything sucked,”. According to Wolfers. 6.3% of the population was unemployed, and the economy was still reeling from the impact of COVID-19. That period was, in Wolfers’ words, “one of the worst economic moments of my life.”

The unemployment rate has been hovering at 3.5% for the past 18 months, which is close to its lowest level in 50 years. The number of jobs increased for the 32nd month in a row in August. Real wages are increasing after accounting for inflation. Everyone now feels more confidence about making new purchases, which keeps the US economy humming.

Or, to put it another way, even when they claim not to be in a good mood, people are spending as though they are.

The gap between reality and perception is the biggest one I’ve ever noticed in my profession, according to Wolfers. If you were to go to sleep in 2019 and wake up in 2023, you would find that the economy is pretty much what you would have anticipated.

How the economy is doing well
Almost tripping over themselves, economists are raising their growth projections. Many banks have dramatically reduced or even reversed their predictions of a recession in 2023.

Invoking unexpectedly strong retail sales figures, S&P Global Market Intelligence increased its third-quarter GDP forecast by nearly two percentage points on Wednesday, to an annualized rate of 4%. It marginally raised the annual estimate to a historically high 2.3%.

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