Why Are Americans Unhappy About the 'Thriving' Economy? — 5 Reasons Behind the Economic Gloom - Yahoo Finance

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With the economy apparently on the up and up post-pandemic, some Americans find themselves unhappy with the current state of affairs.

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The Financial Times reported that only 14% of American voters believe they are better off financially now than when Joe Biden took office, according to a recent poll. At the same time, nearly 70% of voters thought Biden’s economic policies had either hurt the U.S. economy or had no impact. Just 26% of respondents said his policies had helped.

Despite these views, the unemployment rate was recently as low as 3.9%, wage inequality has decreased over the past three years, more jobs are being added to the economy at a record pace, and wages adjusted for inflation have finally surpassed pre-pandemic levels. So, the question remains: Why do some many Americans feel gloomy about a positive economy?

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5 Reasons Why Americans Aren’t Enthusiastic About A Thriving Economy

Here are some explanations as to why Americans are not quite happy about a seemingly positive economy, according an op-ed from The Atlantic:

1. Housing costs are extremely high: The onset of the COVID-19 pandemic sent the housing market into a spiral. Mortgage interest rates have gone sky high as the demand for homes has increased and rates still remain stubbornly high. Those who were locked into mortgages with low, pre-pandemic interest rates are more reluctant to move and sacrifice their low rates. This has led to a smaller available housing stock, which has driven up home prices. At the same time, rents have risen dramatically across the U.S. over the past few years. Inflation (and the demand for housing) have driven housing costs way up — and renters are feeling the pain, too.

2. Inflation is still rampant: It’s clear that the prices of so many things have gone up over the past few years. The costs associated with housing, groceries, utilities, dining out and more have all risen. While the unemployment rate is very low, only a small fraction of Americans are out of work even when unemployment rates are relatively high. Meanwhile, elevated levels of inflation affect everyone regardless of employment status, which continues to plague people’s finances. For Americans, the perception of a “good” economy is more often influenced by lower levels of inflation rather than a low unemployment rate.

3. People need to adjust from rapid economic change: The onset of the pandemic induced negative economic change that affected many people and industries across the U.S. Sudden job losses coupled with high levels of inflation were a huge shock. In fact, in May 2020, about 60 million people reported that they had been out of work in the preceding month because their employer had lost business or closed due to the pandemic. Housing prices — as well as the cost of food, energy, and rent — have all increased. Now that the economy is recovering, Americans seem to need more time to adjust to economic change going in the opposite direction.

4. There are high expectations: After many parts of the economy crashed at the onset of the pandemic, it has taken several years for the economy to turn around. Also, during the pandemic, the federal government provided Americans unprecedented financial support. There was a pause on all federally held student loan payments, millions of eligible Americans received thousands of dollars via stimulus payments, there was expanded federal aid to all unemployed workers, there were many tax breaks granted to parents, a federal moratorium on evictions was in place, and billions of dollars in aid was given to state and local governments. Now that many of these provisions have come to an end, Americans are adjusting to what it means to have a “good” economy.

5. The media hypes up bad news: Despite recent economic progress, the media tends to have a negativity bias which, in turn, affects how Americans perceive the state of the economy. There is a gap between how people feel about the economy overall versus their own personal financial situation, per The Atlantic. Continued negative hype about the economy can both worsen the gap and shape negative financial perceptions.

Overall, Americans still seem to have a generally negative view on the economy. With unemployment levels decreasing, inflation cooling, interest rates dropping and wages increasing, perhaps more Americans will soon change their personal outlook when it comes to the state of the U.S. economy.

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This article originally appeared on GOBankingRates.com: Why Are Americans Unhappy About the ‘Thriving’ Economy? — 5 Reasons Behind the Economic Gloom

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