Why many Americans still feel bad about the economy despite strong data

Take
a
moment
to
consider
your
financial
situation:
Are
you
better
or
worse
off
financially
than
you
were
a
year
ago?
Do
you
think
you’ll
be
better
off
a
year
from
now?
And
where
do
you
see
the
country
headed
in
the
next
five
years?

These
are
the
kinds
of
questions
used
by
the
University
of
Michigan
to
calculate
the
Consumer
Sentiment
Index,
an
economic
indicator
measuring
how
people
feel
about
the
economy.

“It’s
a
measure
that
we
can
compare
over
time
and
get
a
pulse
on
the
attitudes
of
consumers,”
said
Joanne
Hsu,
director
of
the
Surveys
of
Consumers
at
the
University
of
Michigan. “Which
is
important
given
that
consumer
spending
is
over
two-thirds
of
GDP.”

That
survey
and
others
show
there
is
a
pervasive
sense
of
disconnect
between
the
overall
economic
picture
and
how
people
feel
about
the
economy.
Despite
slowing
inflation,
a
healthy
labor
market
with
record-low
unemployment,
and
stocks
that
remain
in
a
bull
market,
consumer
sentiment
remains
below
pre-pandemic
levels.

“People
don’t
tend
to
think
in
terms
of
inflation—economists
do,”
said
Paul
Donovan,
chief
economist
at
UBS
Global
Wealth
Management. “But
economists
are
not
normal.
Normal
people
think
in
terms
of
price
levels.”

Watch
the
video
above
to
find
out
why
consumer
sentiment
hasn’t
matched
up
with
the
economic
reality,
the
factors
behind
the
disconnect,
and
why
the
issue
could
play
an
outsized
role
in
this
year’s
U.S.
presidential
election.