America Is Still Having a ‘Vibecession’

If Donald Trump wins the election, the main reason will surely be that a majority of voters believe that America’s economy is in bad shape. And no matter how much you may dread a second Trump administration, electoral defeat for an incumbent who is seen as presiding over a bad economy is, at least in one sense, politics as usual.

By normal measures, however, the U.S. economy isn’t in bad shape. In fact, it’s doing quite well, better than almost all its global peers.

So much, you may say, for official statistics: If people feel that they’re doing badly, well, when it comes to the economy, the customer is always right.

But here’s the kicker: When asked, most Americans don’t say that they’re doing badly. On the contrary, survey after survey finds that most voters are feeling positive about their personal financial situation, even as they insist that the economy is terrible overall. Some surveys also ask an in-between question: What’s the state of your local economy? And respondents are typically much more positive about the economy in their own state than they are about the nation’s as a whole.

Let me be honest: I didn’t want to write about this subject yet again. I’ve been banging this drum for more than two years and you’ve hung in there with me. But I felt that in good conscience I needed to say something about two new surveys that appear to make the paradox of poor economic perceptions even starker.

Before I get to those surveys, let me say that in some ways the debate about the causes of economic pessimism has moved substantially over time. When I first wrote that there was a disconnect between economic perceptions and economic reality, I think many people dismissed the argument. Over the course of 2023, however, as inflation fell rapidly while the economy defied predictions of recession, there seemed to be ever fewer economic commentators insisting that things really were bad, and more acknowledging that something strange was happening — a vibecession.