What's Behind Americans' Negative Economic Outlook?

Why do many Americans have a negative perception of the state of the economy despite strong output and declining inflation?

Political Pessimism: A Wall Street Journal (Center bias) analysis determined Americans’ poor outlook is more political than economic, writing, “Democrats and Republicans think the economy is great when their party controls the White House and terrible when the other party does.” The writer determines the economy might not be what people are upset about, stating, “pessimism about the economy may reflect dissatisfaction with the country as a whole.”

Inflation, Interest, and Angst: An analysis from the Washington Examiner (Lean Right bias) identified four key reasons why economic confidence is low: inflation, interest rates, the pandemic, and “Republican angst.” While inflation has slowed, prices remain high and are still rising. Rising interest rates have put large purchases, such as homes and cars, out of reach for many Americans. The pandemic fundamentally shook the economic confidence of consumers and investors. Republicans are disproportionately unsatisfied with the economy, “dragging down overall measures of sentiment.”

Economic Disconnect: A New York Times (Lean Left bias) article explored the divide between messaging from the Biden Administration and voters’ perspective on the economy. The Biden team has cited declining inflation and low unemployment as indicators of effective policies, but one analyst is quoted arguing, “that’s not the economy to most people. The economy to most people is gas prices and food and whether or not they can afford to throw a birthday party for their kid.”