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The US economy is in a recession.
At least, that's what a majority of Americans believe, according to a recent poll conducted by Harris for The Guardian.
The economy is, in fact, not in a recession, and by some metrics, it is firing on all cylinders. GDP growth since the pandemic has been rising at a faster pace than in the decade before, and unemployment is near historic lows.
The poll results highlight a big disconnect between reality and Americans' perception of the state of the economy.
Results from the poll include 49% believing that the S&P 500 is down in 2024, when in reality it is up about 11%, extending the 24% gain it experienced in 2023.
Nearly half of poll respondents said they believe that unemployment is at a 50-year high, when in reality the unemployment rate has been below 4% for more than two years and is near a 50-year low.
And 72% of poll respondents said they believe inflation is increasing, when in reality inflation peaked at 9.1% in June 2022 and has since been more than cut in half.
A record number of Americans are employed, incomes are rising faster than the rate of inflation, and 401k balances are hitting record levels, yet most Americans polled by Harris feel that the economic situation is dire.
Driving the disconnect appears to be continued dissatisfaction with inflation.
Even though the data shows that inflation has been mostly tamed, with prices rising at a much slower pace than they were during the pandemic, Americans are still feeling the sting of higher prices at the grocery store, the auto dealership, and in the housing market.
Americans want prices to return to their levels before the pandemic, but that requires deflation, not disinflation. Such an occurrence would probably have to coincide with a very weak economy and is therefore unlikely.
What also appears to be driving Americans' disconnect between their views on the economy and the actual economy is politics.
When polled by Harris, 58% said they believed the economy is worsening because of mismanagement from the Biden administration. This dynamic is on full display when the results are broken down by political affiliation.
While 56% of poll respondents said they believe the economy is in a recession, that number was higher for poll respondents who identified as Republican, at 67%, while respondents who identified as Democrats and said the US was in a recession was lower, at 49%.
The polling results highlight the "vibecession" that millions of Americans have been feeling over the past year, and it ultimately could be a big problem for President Job Biden's re-election chances.
