Americans’ Recession Perception Diverges from Economic Indicators: CNBC

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As a seasoned financial analyst with a background in economic trends and consumer behavior, I find the current discrepancy between positive economic indicators and the widespread belief that the U.S. is in a recession both intriguing and concerning. My personal experiences and observations over the years have shown me that public perception plays a significant role in shaping economic realities.

Based on a report by Jessica Dickler for CNBC, approximately six in ten Americans hold the view that the United States is currently undergoing an economic recession. This belief stems from the increasing expenses people are facing and the resulting financial pressure they experience. The Affirm survey supports this notion.

Based on a survey conducted by Affirm in June involving 2,000 respondents, it appears that a significant number of people believe that the economic recession started around March 2023 and may last until July 2025. Vishal Kapoor, Affirm’s senior vice president of product, pointed out that persistent inflation has placed a heavy strain on households, resulting in diminished faith in the U.S. economy and a growing desire for financial security.

In a May poll conducted by Guardian and Harris, as noted in the CNBC article, around 56% of participants expressed the belief that the United States was experiencing a recession. This belief contrasted with the ongoing expansion of the country’s Gross Domestic Product (GDP) over several years. The National Bureau of Economic Research defines a recession as an economic downturn lasting more than a few months and impacting the economy in its entirety. The most recent recognized recession transpired in 2020, coinciding with the initial stages of the Covid-19 pandemic.

According to CNBC’s report, numerous Americans are finding it difficult to afford basic expenses due to rising prices, resulting in drained savings and heavier usage of credit cards. The conundrum for economists lies in the disparity between encouraging economic statistics and the population’s financial anxiety.

At the CNBC Financial Advisor Summit in May, Joyce Chang, JPMorgan’s global research chair, coined the term “vibecession” to describe the current economic climate. She noted that while homeowners and those with financial assets have experienced substantial gains, a large portion of the population has been excluded, fueling the widespread belief in economic struggle.

“The strain on finances is further highlighted by the fact that more people are falling behind on their credit card payments. According to data from the New York Federal Reserve, as reported by CNBC, approximately 8.9% of all credit card balances became overdue during the previous year. Moreover, a growing number of middle-income families anticipate encountering challenges with debt repayments in the near future.”

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2024-07-29 19:04