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Average americans have precious little disposable income. there are numerous studies that show that X% of americans lack the capacity to cover emergency expence of Y dollars where Y is some trivial sum compared to the GDP per capita. And the things that are excluded usually from inflation measures include stuff like food, fuel, housing etc.
So the americans are squeezed hard and obviously the economy is not doing well. The cost disease has been fucking up americans since the 70s with couple of boom years in the 90s excluded. And I don't think it is slowing, let alone reversing.
In my neck of the woods prices of food, especially animal products almost doubled since pre 2020. Now the absolute price per shitty calorie is still low, especially if you cook at home. But you enjoy either lower quality diet or less discretionary spending for trips to italy. either way your standard of living is lower. If for enough people standard of living is getting lower, the economy is obviously not doing well, no matter what metrics say.
Simple math - if food, gas and housing are 50% of your income, 10% increase in their cost leaves you with 20% less discretionary money.
Well that's just not correct. Americans are at the top 1 or 2 spots when it comes to disposable income depending on how you measure it.
I agree with cost disease in terms of things like education and healthcare (largely because of the Baumol effect) as well as for housing since the US has become a build-nothing country But both of these issues are structural problems that stretch way further back than 2020. The former issue is mostly because of a lack of productivity, while the latter is due mostly to strangling regulations.
On the issue of food specifically, cost has gone up by ~19% since the start of Biden's term, which is significant but food is a pretty tiny portion of most US household's budgets. And again, average incomes also increased to offset this, either mostly or totally depending on the specific economic indicators looked at.
I meant discretionary not disposable sorry. Aka the stuff with which you can do as you please. So what is left in your pocket after taxes, housing, transport, heating, eating and internet are removed.
For the other - I think that we are this point at which the cost disease starts to really hurt - the exponential functions have this nasty habbit of turning from no big deal to the biggest deal ver fast.
For the definition used there, the terms are somewhat interchangeable. It's also not wrong to say real disposable income is below trend. On a cross-sectional basis, @Ben___Garrison cites the US as doing well, but vibes often have to do with expectations, which is along the time axis.
Failing to consider the longitudinal or integrated aspect of the indicators OP chose is the real fatal flaw with the analysis, and why there is such an incongruity with the claimed “goodness” of the indicators and the “badness” of vibes.
Addressing the four main points from the original post:
Being near record lows is very good for people desperately in need of any form of employment; it is not a sign of an overall healthy labor market. Unemployment being below the frictional rate means that people end up in positions that do not best utilize their talents.
This is still 85% above the target rate. That means we’re continuing to move away from trend for long term price levels; might as well returning to trend.
Yes, GDP growth has been surprisingly robust. Does anyone seriously take a single quarter as their landmark though? How many cheered 2023Q3 but also mourned the consecutive negative 2022Q1&2?
It’s a bit odd to compare a forward-looking aggregation of people's outlooks and say it disproves another forward-looking aggregation of people's outlooks. That being said, the stock market must be greater than or equal to 10% of the previous high for the vast majority of its history; how is that an indicator of anything? If anything, the stock market being off its high but not cratered for a sustained period is an indicator of the opposite, that there are heterogeneous or uncertain outlooks for the future which lines up perfectly fine with vibes.
We then go into the fishing section. I have no idea why you would compare wages with inflation and not compare levels. No, wages have not caught up to prices, not even remotely close.
I personally am hopeful for a soft landing, for everyone’s quality of life, but it’s far too early to declare victory and say that inflation was tamed without any economic pain.
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No, it's the same survey every time (just a different year) and it's always misquoted in just that way.
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