The United States is currently facing a “vibecession,” where public confidence in the economy does not align with the actual data. A recent Harris poll conducted for The Guardian revealed that nearly three in five Americans believe the economy is shrinking and in recession, with almost half of those polled also thinking that US unemployment is at a 50-year high. However, these beliefs are not accurate.
One of the primary reasons behind these negative perceptions is America’s post-COVID economic recovery. While the US economy generally rebounded better than other countries, inflation is still putting pressure on average Americans, and the Federal Reserve is maintaining high interest rates. Despite the stock market and GDP reaching new heights, so are costs of living, making borrowing more expensive for Americans.
Politics also play a significant role in shaping people’s views on the economy. A YouGov poll revealed that the percentage of Republican respondents who believed the economy was improving dropped from 64% in November 2020 to 6% after Biden’s inauguration in January 2021. Conversely, Democrats’ optimism about the economy increased after Biden assumed office, despite minimal economic changes.
President Biden faces a challenge in boosting public confidence ahead of the upcoming election. His administration is working on initiatives to reduce gas prices and alleviate student debt. However, as long as prices and interest rates remain high, convincing voters of his ability to make sound economic decisions may prove to be difficult.
The current “vibecession” highlights how closely perceptions of the economy are tied to political affiliation. It underscores how important it is for leaders to communicate effectively with their constituents about their economic plans and policies to build trust and confidence in their ability to steer the country towards a more prosperous future.
