Why People Feel The Economy Is Bad, When Data Show Improvement

 by Petr Svab via The Epoch Times,

The U.S. economy is either chugging along nicely or seriously struggling, depending on who is asked. The mismatch stems from perception and perspective.

While many of the macroeconomic data look benign, they don’t capture the pain experienced by a large segment of society, several experts told The Epoch Times.

At 4.4 percent, unemployment has been only slightly elevated and the median wage growth of 4 percent has more than kept up with 2.7 percent inflation, all according to December data from the Bureau of Labor Statistics.

Yet a solid majority of Americans feel gloomy about the economy, polls indicate.

“I think there’s some element of a vibecession, where the vibes are worse than reality,” said Ben Zweig, labor economist and CEO of Revelio Labs.

It’s understandable that people would be upset about living expenses, even if the inflation rate has subsided, because the previous price increases remain baked-in, according to Zweig.

“People have a very unrealistic expectation that prices should fall to their pre-inflation spike levels, and that’s totally off the cards,” Zweig told The Epoch Times.

“I think people have this cumulative disgruntlement about the economy years ago, and that is very hard to overcome.”

At the same time, “there are some really troubling signs out there,” he said.

Tough Job Market

Excluding the 2020 COVID-19 pandemic shutdown, hiring hit a decade low in November 2025, when businesses hired less than 5.1 million people. It has struggled to take off since.

“People are not moving and there’s just historically low mobility,” Zweig said.

That hits young people, who are just entering the labor market, especially hard.

“Job posting volume is way down, and that is concentrated in younger workers, more entry level positions. So that is a real problem,” he said.

It was also around mid-2024 when wage growth for the lowest-paid workers started to lag, reversing a previous trend. The lowest paid 25 percent of workers enjoyed faster wage growth than the rest of the workforce consistently since mid-2015. But recently, that advantage has disappeared. For the past year and a half, these workers have seen their wages grow substantially slower than the rest, at a 3.5 percent rate in 2025, compared to the 4 percent overall average.

Even the slower wage growth exceeded inflation, but it’s important to understand the reality behind the data.

“Wage growth is not the same [as] individuals getting a raise,” said Ernan Haruvy, professor at McGill University and expert on economic and consumer behavior.

“To get a real pay raise, I have to change jobs. That’s how it works,” he told The Epoch Times.

Technological efficiencies, not exclusively related to artificial intelligence, have likely played a role, according to Zweig, again hitting the lowest-paid and entry-level jobs.

Technology “doesn’t automate jobs wholesale,” he noted.

“It automates little bits of tasks. And you can think of the tasks that people do as being in some hierarchy, from very small, granular micro tasks to very broad, abstract workflows. And it’s a lot easier to automate small and micro tasks, and it’s a lot harder to automate big, chunky workflows. So it happens to be that the highly skilled people are the ones that have the broadest responsibilities, and the lower tier workers are the ones that are doing the simplest work. So I think we do see more labor displacement of the most simple jobs.”

This dynamic is likely to create more income inequality, he estimated.

The economy has also been harsh to older people who find themselves with only a fraction of what they need to save in order to retire, especially with the looming Social Security insolvency, Scott Siff, founder and CEO of Pivoter, a job matching platform for people 55 and over, said.

“Those folks are feeling things like above-average inflation and higher prices for staples like groceries much more acutely,” he told The Epoch Times in a text message.

“That is only compounded by the fact that those same people face huge barriers finding jobs. With the average age of job-seekers on the online job boards only about 28–30 years old, employers have trouble hiring those folks even if they’re willing to.”

Haruvy doesn’t see the tough labor market going away.

“We'll just have to get used to the new reality, which is more competition, more skill updating, less certainty,” he said.

Financial Squeeze

Regardless of income growth, Americans are far from achieving financial health.

The savings rate dropped to 4 percent in September, the lowest since 2008, excluding 2022, which was distorted by pandemic stimulus payments.

Credit card debt exceeded $1.2 trillion in the third quarter of 2025, with more than $150 billion of that amount over 90 days delinquent.

“Right now, people are dipping into their savings,” Haruvy said.

Nearly half of Americans used savings to cover expenses last year, according to Resume Now’s 2026 Cost-of-Living Crunch report.

The same survey, however, also indicated some improvement.

While at the end of 2024, 36 percent of those surveyed said they couldn’t afford or struggled to cover basic expenses, at the end of 2025, only 24 percent said the same.

The debt data, too, show a positive trend, with the overall debt balance growth slowing down and even dropping a bit in November data, while delinquency rates have followed the same trajectory.

https://www.zerohedge.com/personal-finance/why-people-feel-economy-bad-when-data-show-improvement