Jun 3, 2024 - Economy

Vibecession "now more than ever"

Illustration of four side eyeing Benjamin Franklins in quadrants with charts, graphs and symbols floating atop them

Illustration: Natalie Peeples/Axios

The vibecession is so back.

The big picture: "I think we are in one now more than ever and I think it will get worse in the election," says Kyla Scanlon, who coined the term and is the author of the new book, "In This Economy?"

Zoom in: The divide between sentiment and the economy is something economists will be trying to figure out for years, says Matt Colyar, an economist at Moody's.

Here are some of the explanations people are throwing around:

Prices and inflation. People don't like higher prices. And even though wages have largely kept up, that doesn't seem to help. Increasing pay isn't seen as a result of inflation, it's attributed to one's success — while rising prices are blamed on politicians and companies.

  • Also, prices have become unpredictable, says Rakeen Mabud, chief economist at Groundwork Collaborative. That can be "destabilizing"

Economic inequality. The economy may be "humming along" because of the income and spending of the most affluent, but most families could still feel that they are languishing, writes David Kelly, chief global strategist at J.P. Morgan Asset Management in a note out last week.

  • Lower-income folks do face higher levels of inflation. Moody's Colyar calculates in a recent paper that the highest earners faced a 3.7% inflation rate in March, compared to 4.3% for the lowest.

Fractured media environment: "Over the decades, Americans have generally moved away from watching the evening news or reading newspapers, migrating to cable news shows with political bias on both sides and various online feeds with even greater political bias," writes Kelly.

  • "Economic statistics are rarely covered while the public is increasingly bombarded with a long string of stories to be worried or angry about."

Post-COVID feelings of isolation, anxiety and loneliness.

The bottom line: It isn't hard to come up with reasons Americans feel gloomy. And if your day-to-day reality feels bad, it doesn't matter what the latest economic report says.

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