Despite the positive economic indicators in the United States, a large portion of the population feels otherwise. Recent surveys have shed light on the prevailing sentiment among Americans, with many believing that the country is currently in a recession. The perception of economic downturn is strongly rooted in the daily struggles faced by individuals, such as increasing costs and financial difficulties.
Key findings from the surveys include:
- Approximately 3 in 5 Americans perceive the U.S. to be in a recession, as per a survey conducted by Affirm among 2,000 adults. Most respondents pinpointed the start of the recession to around 15 months ago, with projections extending until July 2025.
- Factors such as higher expenses and challenges in meeting financial obligations have contributed to this negative outlook.
- Vishal Kapoor, senior vice president of product at Affirm, highlighted how persistent inflation has exacerbated the burden on households, leading people to seek ways to regain control over their finances.
- Another poll conducted by Guardian/Harris in May revealed that 56% of respondents share the belief that the U.S. is in a recession, despite the growth in gross domestic product for several consecutive years.
The discrepancy between economic indicators and public perception has sparked discussions among economists. This growing disparity has been coined as a ‘vibecession’, a term coined by Joyce Chang, JPMorgan’s chair of global research. Chang acknowledged the uneven distribution of wealth, with only select segments of the population benefiting from economic prosperity.
While homeowners and affluent individuals have seen significant wealth accumulation, a substantial portion of the population has grappled with financial hardships. This disparity has widened over the years, leaving many households vulnerable to rising expenses and interest rates. Consequently, there has been a notable increase in delinquency rates for credit card payments.
- The New York Fed reported that approximately 8.9% of credit card balances transitioned into delinquency over the past year.
- Middle-income households are anticipating challenges with debt payments in the foreseeable future.
As Americans continue to navigate the financial strains brought about by economic uncertainties, it is crucial to address the underlying issues contributing to the prevailing sentiment of recession. By understanding the factors influencing public perception and adopting measures to alleviate financial burdens, policymakers and individuals alike can work towards a more stable and equitable economic landscape.
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