As I’m sure many people can confirm, planes are flying full, while shops and restaurants are jammed. It definitely looks like a booming economy out there.
That’s also what the numbers say. In his State of the Union address, President Biden — while acknowledging that inflation has eroded wage gains — pointed to the 6.5 million jobs added last year, “more jobs created in one year than ever before in the history of America.” This claim was entirely correct.
According to the long-running Michigan Surveys of Consumers, a plurality of Americans say that their personal financial situation is better than it was a year ago. This is consistent with estimates suggesting that despite inflation most people saw rising real income in 2021. You can quibble with the estimates, but it’s clear that no major group is substantially worse off. And it’s worth remembering, for historical context, that blue-collar real wages declined steadily for most of the Reagan era, which didn’t stop voters from seeing that era as one of economic triumph thanks to strong job growth.
Long-run inflation expectations have stayed remarkably stable, suggesting that people don’t see things as being out of control. And again, inflation aversion can’t explain why people say that we’re losing jobs amid a huge employment boom.
So there’s something odd happening here, even if what it is ain’t exactly clear.
Yet the public doesn’t believe it.
what people are actually experiencing in their daily lives is a very strong job market. For example, according to the latest survey from the Conference Board, 53.8 percent of consumers said that jobs were “plentiful,” a near-record, while only 11.8 percent said that jobs were hard to get. And anyone who walks around U.S. cities can see the proliferation of help-wanted signs.
what voters believe does not always reflect reality. When Biden administration officials argue that they’ve done a better job on the economy than they get credit for, they have truth on their side.
And while I do not come here to bash the news media, I do feel that we’re missing a big part of the story if we take negative public views of the economy at face value without pointing out that they’re at odds not just with official statistics but also with self-reported experience. And we should try to understand where that disconnect is coming from.
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