59% of Americans Sense a Recession Vs. Government Officials Soft Landing Claims

U.S. Government’s View on the Economy
Public Perception of Economic Recession

U.S. government officials, including Treasury Secretary Janet Yellen and National Economic Council (NEC) Director Lael Brainard, have repeatedly stated that the U.S. economy is smoothly transitioning into a soft landing phase. However, a recent survey shows that more than half of Americans feel that they are currently in an economic recession, further highlighting the gap between expert assessments and public perception of the economy.

Yellen stated at a Wall Street Journal (WSJ) event on December 12 (local time), “To me, a soft landing is the economy continues to grow, the labor market remains strong, and inflation comes down. And I believe that’s the path we’re on.” She emphasized that the final journey towards the Federal Reserve’s (Fed) inflation target of 2%, as indicated by the November Consumer Price Index (CPI) increase of 3.1% compared to the same month last year, would not be painful for citizens. Yellen attributed the negative perception of a strong economy among the public to the stress of the COVID-19 pandemic and the continued rise in prices. The Biden administration, competing for re-election in next year’s elections, views the price burden resulting from inflation as a substantial threat.

Lael Brainard’s Assessment

Brainard, a former Fed vice chairman, also evaluated the U.S. economy on the same day, stating, “Growth is strong, inflation has slowed, and the jobless rate remains low.” She believes the unemployment rate is lower than what the financial market considers necessary for slowing down inflation. Additionally, for the first time since the pandemic, the wage growth rate has surpassed the inflation rate, and the supply chain issues contributing to inflation have been resolved. Brainard observed that numerous citizens face challenges, emphasizing the need to lower household costs. She referred to this as the “president’s top economic priority,” highlighting the ongoing efforts required in this area.

Survey Results on Economic Recession

Despite these assessments, Americans’ perception of an economic recession has not improved. Fox Business reported on a survey conducted by financial information company Bankrate from October 26 to 30, in which 59% of respondents agreed that the U.S. economy is in a recession. The survey results showed that regardless of income level or generation, the majority felt the pressure of an economic downturn. Among households with an annual income of less than $50,000, 60% thought they were in a recession, while among high-income households earning over $100,000, 61% agreed. By generation, 65% of Generation X (ages 43-58) felt they were in a recession, as did 60% of Millennials (ages 27-42), 58% of Baby Boomers (ages 59-77), and 55% of Generation Z (ages 18-26).

Additionally, they pointed out that despite experts giving a positive evaluation of the U.S. economy, they have not convinced the general public of this perspective. Bankrate analyst Sarah Foster stated, “Americans seem to be evaluating the economy with different metrics than experts.” She explained, “While economists are watching carefully for broad-based declines in growth, households focus on whether they can afford their needs and the occasional wants while still having enough money left over to put toward key financial goals like saving for emergencies and retirement..”

By. Jung Ho Park