Nobody dishes out the big data like the Spritzler Report. This is like Heroin baby!
Interesting that despite all the woke talk about BLM and such, race relations appear at the bottom of the list below. People care about their own sheet first which means the cost of things and crime. Two things that are perceived to be a shortcoming for the current administration.
Joe may point to the lowering of current inflation rates, but mortgage rates are sky high and the cost of "things" is still greatly elevated since before the pandemic.
Americans may trust real estate, but there's an excellent chance that the real estate bubble we're living in will burst or lose steam. That may leave a great many folks, particularly new home buyers feeling depressed.
The US is pulling away from its EU peers and will continue to do so. Europe is toast.
Through the looking-glass
A recent Harris X Guardian poll made for some striking reading for those of us who spend our days buried in data. According to the survey, the majority of Americans believe the nation is currently in a recession (it’s not), 49% think the S&P 500 is down for the year (it’s up 11%), and the same percentage believe unemployment is at a 50-year high (again, it’s not).
It would be easy to dismiss the survey, but if a significant number of Americans feel the economy isn’t working for them, we have to ask: what’s going on?
The simplest explanation is that most of us are bad at gauging how a $30 trillion economic machine is faring. So, we focus on our own financial situation — and on a personal level, many people are feeling the strain because of the one elephant in the room that just won’t go away: inflation. Indeed, a Gallup poll from March found that inflation continued to outrank crime, healthcare, terrorism, energy, the environment, drug use, and many other topics as America’s top concern.
Sticky downwards
Arguably the biggest problem is that economists tend to focus on the bleeding edge of the economic data, often looking not just at the level of inflation, but estimates of its trajectory — is it accelerating, decelerating, etc. But, as one astute investor posted on X (formerly known as Twitter)… that’s not what normal people care about.
If inflation is 10% annually for 2 years, and then drops to 5% in the third year, economists and investors may rejoice at the progress, but almost no-one else will blink. That’s because the cumulative effect of that sequence of events is a 27% increase in prices over 3 years… which people notice when they buy butter, insurance, hot dogs, or gas. That example is not a million miles away from what has actually happened.
Many prices are now 20-30% higher than they were in 2020 — and, while inflation has cooled substantially, to just 3.4% as of the latest CPI report, that still means costs are rising. McDonald’s went so far as to comment directly on its own price rises, after videos of expensive Big Mac meals, including one for $18, went viral. McDonald’s says its prices are up 40% in the last 5 years, reflecting a broader rise in the cost of labor, paper, and food.
Good as gold...
…or in the case of real estate, even better.
Per a 2024 Gallup survey, Americans of all income levels firmly believe that real estate is the best long-term investment over stocks, bonds, gold and crypto — and for good reason.
Homes tend to go up in value, and buyers know they’re a good way to build equity. But for many, it’s hard work getting a foot in the door.
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USA #1
Another reason economists might have a rosier view of the American economy than the general public? A global perspective. Indeed, the US has seen real GDP grow by nearly 9% since the pandemic began, by far the strongest of any of its G7 peers, which have averaged only 2.7%. Canada’s economy has been the next best in the group of seven, growing 5%.
The hiccup in the US recovery was a brief two-quarter GDP dip at the start of 2022 — fitting the classic recession definition. But, the National Bureau of Economic Research, which makes the final decision, decided not to classify it as one. Furthermore, despite all the talk of mass layoffs and automation, US unemployment has remained below 4% since the beginning of 2022, near historically-low levels.
In contrast, the UK economy has been much weaker than America’s. Indeed, British GDP is barely larger, in real terms, than it was at the end of 2019… just as the electorate gears up for a July 4th election.
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