Americans Are Flush With Cash and Jobs. They Also Think the Economy Is Awful.

[Demovictory9]

Americans Are Flush With Cash and Jobs. They Also Think the Economy Is Awful.
The psychological effects of inflation seem to have the upper hand.


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This is the great contradiction that underlies President Biden’s poor approval ratings, recent Republican victories in state elections and the touch-and-go negotiations over the Biden legislative agenda. It presents a fundamental challenge for economic policy, which has succeeded at lifting the wealth, incomes and job prospects of millions of people — but has not made Americans, in their own self-perception, any better off.

Workers have seized the upper hand in the labor market, attaining the largest raises in decades and quitting their jobs at record rates. The unemployment rate is 4.6 percent and has been falling rapidly. Cumulatively, Americans are sitting on piles of cash; they have accumulated $2.3 trillion more in savings in the last 19 months than would have been expected in the prepandemic path. The median household’s checking account balance was 50 percent higher in July of this year than in 2019, according to the JPMorgan Chase Institute.

Yet workers’ assessment of the economy is scathing.

In a Gallup poll in October, 68 percent of respondents said they thought economic conditions were getting worse. The share who thought things were getting better was lower than in April 2009, when the global financial crisis was still underway. And it is not merely a partisan response to the Biden presidency. In the University of Michigan’s consumer sentiment survey, Republicans rate current economic conditions worse than Democrats do — but both groups give ratings about as low as they did in the early 2010s, when unemployment was much higher and Americans’ finances were a wreck.

The reasons seem to be tied to the psychology of inflation and the ways people assess their economic well-being — as well as the uneven effects that rising prices and shortages have on different families. It may well be shaped by the psychological scars of the pandemic, one manifestation of this being an era of exhaustion.

https://www.nytimes.com/2021/11/06/upshot/inflation-psychology-economy.html

[BlueTsunami2018]

1. I'd love to be "flush" with cash.

I’m certainly not and I don’t know many who are. I do know I work myself to the point of agony and see less return for my hard earned dollars. That’s reality for very many of us.

I also know that this isn’t the fault of the President or the party in power. The policies they present would take a lot of this burden off, if a couple of jackasses who are supposed to represent people like us would just get on board.

It doesn’t seem likely they will.

[Norbert]

2. This upper hand in the labor market

Last edited Tue Nov 9, 2021, 08:32 AM - Edit history (1)

Though it is very real it is not widespread.

My site of a multinational company is still stuck in 2019. New code of conduct rules take effect in two weeks. I am okay with that but not the doubling down of it. Department management have force some people (me included) out of jobs they have worked for years and into other jobs that do not particularly like. The alternative is the out-door. Meanwhile many jobs have gone unfilled for months.

As in this report, my bank account has been replenished and our home has had some upgrades this year. Because of the recent developments at work it has taken a toll mentally. Currently I no longer have a career, just a job. Even at my age, I am testing the waters for work in my field, some peace of mind and a softer landing into retirement.

An no, it is not Joe Biden's fault, but the indifference and misguided determination of some seemly upwardly mobile people.

[Sherman A1]

4. Precisely

Although happily retired, it is easy to see that the upside of the “labor shortage” is no where evenly distributed. One need only look a bit beyond the headlines.

[betsuni]

3. People think the economy's terrible when there's a Democratic administration.

[Cosmocat]

7. T H I S

The lunatic, his entire party and conservative media spent four years screaming with every breathe HE had the greatest economy ever in the history of mankind, THEY believed it and the soft headed heard all that and believed it.

Process is now working in reverse.

[Fiendish Thingy]

5. Most of the workers weren't alive in the late 70's/early 80's when inflation was in double digits

So the current 4-6% is the highest they’ve ever know.

[Johnny2X2X]

6. Wage and job growth

This has been just an incredible recovery, unprecedented is speed and scope.

Record jobs growth, record wage growth, highest GDP growth in decades. If a Republican were in charge they'd be throwing ticker tape parades for them.

A reminder, Donald Trump was a total and complete economic disaster for the US. He had the worst jobs record since Herbert Hoover, and left the economy with the worst year for growth since 1947.

[Wounded Bear]

8. 2016 Redux...nt

[Cairycat]

9. Personally, working more hours

is what has meant more cash in our household, not wage increases or bonuses. What extra cash we have is going to pay higher utility costs, and repairing teeth that didn't get dental care when the pandemic was worse.

[The Mouth]

10. Inflation is brutal to those on fixed incomes

Anyone who doesn't think 4%+ inflation will get us Trump 2024 is not only an idiot, they are callous.

Inflation hits those at the bottom of the economic ladder the hardest, and decimates those on fixed incomes; anyone who is not deeply bothered, even paniced by this is a wretched excuse for a human being.