Amid the current state of the US economy, a phenomenon known as a “vibecession” is occurring, where public perception of the economy contradicts actual economic data. A recent Harris poll conducted for The Guardian found that almost three out of five Americans believe that the economy is contracting and in recession, with nearly half of respondents thinking that US unemployment rates are at a 50-year high. However, these beliefs are not supported by factual information.
The lingering negative vibes surrounding the economy can be attributed to several factors, including the aftermath of the economic recovery post-COVID, rising inflation rates putting pressure on average Americans, and the Federal Reserve’s maintenance of high interest rates adding to financial strain. Despite this, both the stock market and GDP are reaching new heights. However, it is becoming increasingly expensive for Americans to borrow money due to rising costs of living.
Politics also play a significant role in shaping people’s perceptions of the economy. A survey conducted by YouGov revealed a drastic shift in views among Republican respondents regarding the economy following Joe Biden’s inauguration in January 2021. On the other hand, Democrats’ views on the economy saw a sharp increase despite minimal economic changes following Biden’s assumption of office.
Given this deeply entrenched relationship between Americans’ perspective of the economy and their political allegiances, President Biden faces challenges in improving public confidence in his economic policies ahead of upcoming elections. While his administration works on reducing gas prices and addressing student debt, high prices and interest rates could hinder his efforts to sway voters skeptical of his ability to navigate the economy effectively.
