Jun 4, 2024 - Technology
America's great nonpartisan divide
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There's a big, nonpartisan gap between how people see their finances (pretty good) and their view of the overall economy (terrible).
Why it matters: The schism has both political implications — it's hard to get re-elected if voters think the economy stinks — and points to troubling conclusions about Americans' awareness of economic reality.
Driving the news: The divergence showed up in the most recent Federal Reserve survey on economic well-being.
- For the poll, respondents are asked to choose from four options to describe how they're doing.
- The top two choices are "living comfortably" and "doing OK." 72% of Americans landed in those categories.
- Respondents are also asked about the financial well-being of the national economy. The top two choices, "excellent" and "good," were chosen by only 22% of Americans.
The big picture: The gap between people's perceptions of their financial well-being and that of the national economy has nearly doubled since 2019.
- In the past, poor consumer sentiment typically lined up with economic slowdowns.
- But today's negative consumer outlook doesn't align with the generally positive economic data, and it certainly isn't translating to behavior — people are still spending.
