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Hey, America, here’s what’s actually going on with the economy

Angle-down symbol A symbol in the shape of an angle pointing downward. The United States is not in a recession and experts do not expect one to occur soon. Michael Raines/Getty Images; Jenny Chang-Rodriguez/BI

  • The US is not in a recession; in fact, in a Harris poll for the Guardian, a majority of Americans said there was one.
  • Media coverage is one possible explanation for why Americans feel that the economy is not doing so well.
  • Business Insider looked at data to find out what is really going on with the US economy.

Hey, America, we I completely understand if you don’t have such good feelings about the economic situation.

But if you think we’re in a recession, we have good news for you: We’re not in one, and there’s probably not going to be one, based on the economic data and the views of experts who spoke to Business Insider.

According to a Harris Poll for the Guardian, 56% of Americans believe the US is in a recession, and a majority believe our economy is shrinking. Two reasons people feel the economy is not doing so well – even though the US has not officially been in a recession since the two-month recession in early 2020 – are media coverage and the way people view economic trends.

David Kelly, Chief Strategist for Global Asset Management at JP Morgan; Eugenio Alemán, Chief Economist at Raymond James; and Gregory Daco, Chief Economist at EY. told Business Insider that the US is not in a recession.

“Americans’ negative attitudes toward the economy are largely due to the media’s relentless negative coverage of economic and social issues, amplified by even more negative social media feeds,” Kelly said in a statement to Business Insider.

Of course, not everything is perfect and that could cloud people’s views. Daco said when you factor in cost fatigue, the cumulative impact of inflation, the largely frozen and unaffordable housing market and also “the lower turnover in the labor market and the perception that there are fewer opportunities in terms of jobs, then that leads to more pessimism about the expected state of the economy.”

“And I think that’s what we’re seeing in this particular survey: There’s a difference between the perception of consumer spending trends, inflation trends and employment trends and the data perspective,” Daco said, adding, “This misperception is compounded by the fact that we have different sources of information, different media sources, which could distort the underlying assessment of economic developments.”

If you want to learn more about economic development, take a look at the charts below.

US GDP continues to grow

Kelly cited “quarterly GDP growth and expected growth” as one of the “key numbers to watch,” along with wage gains – which have cooled recently but still signal a strong labor market – and weekly jobless claims – which have been low because mass layoffs have not yet occurred.

US real GDP remained robust, although growth slowed.

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The unemployment rate in the USA was low

Although the unemployment rate rose from 3.8 percent in March to 3.9 percent in April, it is still low.

“We still see strong momentum in job growth,” Daco said. “We have a historically low unemployment rate.”

During the Great Recession, the U.S. unemployment rate skyrocketed from 5.0% in December 2007 to 9.5% in June 2009. It took years for the labor market to fully recover from that recession, while unemployment fell rapidly after the short but deep Covid recession in 2020.

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Consumer Price Index data shows that inflation in the US remains stubborn but below 4%

Inflation is still high and stubborn, but the year-over-year change in the consumer price index has cooled from the high rates of 2021 and 2022. Alemán said that while inflation is comparatively low, “the rise in inflation since 2021 has left Americans figuring out what to buy and what not to buy – something we were not used to before.”

“Probably the cost of finding a better price has added a lot of stress to Americans’ lives that they didn’t have before,” Alemán said.

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The S&P 500 has been rising for over a year

In 2024, the S&P 500 hit several all-time highs. The Harris Poll for the Guardian found that nearly half of respondents thought the S&P 500 index was actually down.

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There is neither a recession in the US nor will one come soon

If you’re worried about an impending recession, you might feel better knowing that experts don’t fear it. Alemán said Raymond James doesn’t foresee a recession but expects a slowdown in economic activity. Looking ahead to the next 12 months, Daco said the likelihood of a recession is relatively low. Kelly said the U.S. isn’t even close to a recession.

“In fact, the so-called misery index, which is the sum of the inflation rate and the unemployment rate, is currently at 7.3 percent,” said Kelly. “That is better, i.e. lower, than it has been in over 75 percent of the last 60 years.”

There are still some data points and trends that may be of concern to Americans. Sales of existing and new homes have been declining recently. Mortgage rates are back below 7% but still high. Some major companies are laying off workers, inflation has not yet returned to the Fed’s 2% target, and interest rates look set to remain high for a while.

“The longer we have interest rates as high as they are today, the greater the likelihood that something will break and we could face a recession in the future,” Alemán said.

So here’s to a time when there is no recession, and probably not one anytime soon. However, just because we are not in a recession does not mean that the economy is perfect.

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