How do you feel about the state of the economy?
In more contemporary terms, what are your “vibes” telling you?
Are you feeling confident and comfortable?
Or are you feeling a nagging worry that things aren’t going well?
If you’re experiencing a disconnect between official economic data and your personal perception, you’re not alone.
This phenomenon has recently been dubbed a “vibecession” in popular media – a term that captures the gap between economic indicators and public sentiment.
Officially, the economy is in pretty good shape.
Recent data suggests that inflation is still cooling.1
The jobs market is still steaming ahead, with both wages and hiring up in May.2
Markets have been on a tear, and the S&P 500 has hit 30+ record closes this year.3
By most measures, economic prospects are solid.
But many Americans are still feeling pessimistic about the economy.
In a June survey, 70% of Americans reported that the economy was doing badly.4
Even when 61% said that their own personal financial situation was good or excellent.
That gap between data and opinion? That’s the “vibecession.”
And the challenge is that it can become a self-fulfilling prophecy.
If too many people believe that the economy is floundering and a recession is imminent, it can absolutely drag on economic growth.
What’s contributing to the gap in perception?
I think it could be a lot of things.
Many Americans have been left out of the recent boom, and they’re struggling with high prices.
Housing prices remain high and home ownership has become out of reach for many (especially young Americans).
We also have a 24-hour news cycle hammering us with gloomy headlines.
What do you think? What’s causing the “vibecession”?
Bottom line: Though the vibes are weird, the economy is still doing well.
What’s most important is that we don’t let vibes push us away from the goals and plans we’ve created.
A recession may be on the horizon, but there’s no way to know if or when it could arrive.
We’re keeping an eye on the data, and we’ll be in touch with updates as needed.
My team and I are here to listen and reassure.
Sources:
3. https://www.cnbc.com/2024/06/
4. https://poll.qu.edu/poll-