Why Americans feel so bad about a growing economy

Welcome to “boom.”

The term is a portmanteau of the words “boom” and “recession.” It highlights how the average American doesn’t feel like they’re reaping benefits economy That is – on paper – buzz, according to the creator Matt Stoller.

Economic output and the stock market are rising, consumers are spending big, and the post-pandemic recession many predicted has not materialized. But many of them feel worse about their finances, with debt at all-time highs and a majority of Americans wrongly believing the country is going through an economic slowdown.

“Traditionally, the economy is in really good shape,” said Stoller, an antitrust advocate and research director at the American Economic Liberties Project, a nonpartisan think tank. “But ordinary people say they are not.”

It is thematically similar to “vibration” A term that became popular in 2022 to explain the disconnect between strong economic data and negative consumer confidence readings emerging from the pandemic. It can also make comparisons with “K-shaped economy” A phrase that describes how Americans can feel very differently depending on their income bracket.

He said Stoller’s “prosperity” framework aims to bring awareness beyond mere opinion about the material financial hardships faced by those not in the upper echelons of America. Once you put that in context, Stoller said, it becomes easier to understand why so many Americans believe the national economic engine they help put in power isn’t moving them forward.

On the surface, Stoller said the “boom” theory could help explain why data in recent years show that U.S. GDP growth has not been associated with better consumer confidence readings. This represents a significant departure from the usual trend we have seen over the past six decades.

“I’ve never seen anything like this before,” said Diane Swonk, chief economist at consulting firm KPMG. “I’ve been doing this for 40 years. That’s a long time to never see anything like this.”

Stoller and economists say that helping drive this disconnect is the truth Economic inflation It is not one size fits all. Data shows that consumers experience different rates of price growth based on factors such as their income bracket or geographic location.

Grocery and shelter inflation rose the most of any staple commodity tracked by Morgan Stanley between 2020 and 2025. The bank found that these two categories accounted for a disproportionately high share of low-income consumers’ spending in 2024.

Low-income people historically see higher inflation rates than their better-off counterparts, said Heather Berger, an economist at Morgan Stanley. The inflationary gap widens when aggregate price growth is above average Federal ReserveA target of 2% – as has been largely the case over the past few years, according to the bank.

This cannot be written off as a post-pandemic idiosyncrasy. The Federal Reserve Bank of Atlanta reported this year that food prices It rose about 9% more in poorer areas than wealthier areas between the second quarter of 2006 and the third quarter of 2020. Having more grocery stores in underserved communities can increase competition and lower prices, which in turn helps reduce inflation disparity, Stoller said.

“If you look at monopoly as a systemic feature of the American economy and price discrimination as a systemic feature of the American economy, it’s not that hard to jump from there,” Stoller said. “Happy people get different prices than sad people.”

president Donald Trump Initiatives aimed at… Reducing house prices and Pharmaceuticals this year. Trump claimed last month that there was “Practically no” US inflation is rising despite the latest data showing rates above the 2% annual level considered healthy by monetary policy makers.

Economists and investors are watching to see how this plays out Affordability initiatives Escalation ahead of the midterm elections in November.

Meanwhile, households feel less isolated than they did when pandemic stimulus programs were launched in the early 2020s, said Elizabeth Renter, chief economist at financial education platform NerdWallet. Credit card debt amounted to a Record high $1.28 trillion in the fourth quarter of last year, according to New York Federal Reserve data released last week.

While high prices have been a perennial problem since the inflationary shock caused by the pandemic, consumers without financial safety nets have recently focused their concerns on… Labor market.

Economists have described the current business background as a “Unemployment boom” and “Employment stagnation.” Chairman of the Federal Reserve Bank Jerome Powell It was named A Low rent, low fire environment.

Job openings for December decreased to Lowest level since 2020 Although the stock market rose more, the data shows. Because higher-income groups are more likely to own stocks, economists say continued gains in these holdings could boost economic confidence and boost consumer spending. Meanwhile, anxiety hangs over the rest of the country as the job market tightens.

“If you have assets that have really high values, you feel supported,” said Joan Hsu, director of consumer surveys at the University of Michigan. “But strong stock markets don’t mean a lick if you don’t own any stocks.”

Federal statistics show that economic output per hourly worker emerged from the pandemic to an all-time high last year. But this could be bad news for employees: a raise could be taken as a sign of this artificial intelligence It increases productivity, which can encourage companies to reduce the number of employees.

Nike, Amazon and UPS It announced widespread job cuts this year. Layoffs rose more than 200% From December to January, according to consulting firm Challenger, Gray & Christmas.

So called Work shareThe percentage of economic output that flows to workers in the form of compensation fell to new lows last year. What’s more, the gap between corporate profits and employee wages as a share of GDP has widened to its widest levels ever. Michigan Sentiment Survey declined Near all-time lows last year.

Strength in consumer spending despite poor sentiment helped the economy expand faster than expected rate 4.3% in the third quarter of 2025. However, total spending is driven more than ever by the richest 20% of Americans, according to a Moody’s analysis. Fourth-quarter GDP data is scheduled to be released on Friday.

The January Nonfarm Payrolls report was released last week Hotter than economists expectedwhich provides hope for stability in the labor market. But these overall gains were mainly driven by the health care sector, which alone accounted for more than half of the net growth.

Nearly three-fifths of Americans believe that the US economy is currently in a recession recessionwhich is broadly defined as a period of several quarters with negative growth in GDP, according to a Guardian-Harris poll Conducted in December. This represents an 11% increase from a similar survey conducted earlier in 2025.

A new Snap Finance poll shared exclusively with CNBC shows just how dire the outlook is for those at the bottom of the financial food chain.

Only about a quarter of respondents described their current financial situations as “unstable” or “very unstable,” according to data released Wednesday. But that percentage rises to 41% for those with credit scores below 670 and 54% for people in households with incomes of $50,000 or less.

Snap Finance They were surveyed More than 1,400 people in December.

This could help explain growing doubts about economic data released by the government. Found YouGov The number of Americans who trust federal reports on the economy has declined compared to August of last year, a reversal from a few months ago. Trump Fired Erica McIntarver, former commissioner of the Bureau of Labor Statistics, in August, suggesting that the agency was manipulating labor market data under her leadership.

But NerdWallet tenants cautioned against concluding that these reports — which are supposed to be aggregated readings — aren’t necessary if they don’t match how an individual is feeling. These national datasets could help, for example, ensure that economic grants are allocated appropriately, she said.

“Multiple experiments can be correct,” Renter said. “The economy can be in very good shape, and millions of people are not feeling great about it at the same time.”