Americans really hate the so-so economy, worried about recession

But lately I’ve found it harder to paint such a rosy picture. The economy is not bad, but the overall situation is increasingly frustrating. However much the inflation rate has fallen, 2019 prices are not coming back. The Federal Reserve will start cutting interest rates soon and provide some relief, but if you’re thinking about buying a new home or car, it’s probably best to wait. The same goes for changing jobs – given the state of the job market, it’s best to stay where you are, especially for the white-collar crowd.

For months and months it felt like the other shoe in the economy was about to drop. That is, in October 2022, Bloomberg’s economic model said there was a 100% chance of a recession in the next year. That recession didn’t happen, but the vibecession did. Now, the economic indicators are not flashing red, but they are not flashing green either. We are in standby mode.

“There’s a bit of collective holding of breath,” said Allison Shrivastava, associate economist at Indeed. “Will we hold this landing or will things continue in a downward trend? We expected it to be a cold labor market — that’s kind of the goal — and it’s always just, you know, How cold?”

The economic uncertainty is exhausting and is compounded by the upcoming election.

“We have a lot of consumers telling us they’re reserving judgment on what’s going on until the election is settled,” said Joanne Hsu, director of consumer research at the University of Michigan. “They say there’s no way to tell.”

“It’s so long over” has become a bit annoying on the internet lately. It signals a downward turn of events, things not going your way – the opposite of ‘we’ve come so far’, when things are on the upswing. That being said, when it comes to the job market… it’s basically over. The jobs boom the US was seeing in 2021 and 2022 is well in the past and there are clear signs of slowing.

The economy added 142,000 jobs in August and the unemployment rate fell slightly to 4.2 percent. That’s an improvement from July’s 4.3 percent unemployment rate, but overall, the U.S. labor market is cooling. Job openings in July returned to 2021 levels. Hiring and exit rates rose this month but returned to pre-pandemic levels, although layoffs remain low. Which means that if you have a job, you’ll probably be able to keep it, but if you’re looking to move or are unemployed and looking for work, you might have a tough time.

Much of this is to be expected – part of the reason the Fed raised interest rates was to slow the economy, including the labor market. It is not reasonable to expect the economy to add jobs at the rate it was immediately after the pandemic.

“If you imagine a labor market as a bathtub, the bathtub is full,” said Dana Peterson, chief economist at the Conference Board. “So you don’t have to turn on the water, you don’t have to turn on the faucet hard anymore.”

However, the end of a party is never particularly fun. Now, even just knowing that the job market is on shakier ground is anxiety-inducing—average monthly job earnings are steadily falling, and there’s no telling what will make that decline stop. Part of the story varies by sector – if you work in tech, you might have a tougher time finding a job than if you were looking for something in healthcare or construction.

Even just knowing that the job market is on shakier ground is anxiety-inducing.

Some workers feel they’ve missed the boat on all the jobs of the last two years, and now it seems the opportunity to participate has passed. Despite the strong job market, I send endless resumes out into the ether without getting a bite, and I don’t understand why. Jaime-Alexis Fowler, founder of Empower Work, a nonprofit that offers a worker hotline, said she’s heard a lot of frustration from workers looking for good jobs and not being able to find them. This has led some of them to fall for scams and fueled animosity among those who work in person but want to work from home.

“People felt like there was just this dissonance between their direct experience and what they heard was happening with the economy,” she said. “And so I felt there was something wrong with them. “I didn’t answer.”

For many people, the current environment feels just a little whitewash. There are so many unknowns that make it difficult to figure out what the right move is.

Do I buy the house now and pay a higher mortgage rate, or do I wait and risk house prices rising even more six months from now? Do I try to quit this crappy job or do I keep it because at least maybe the higher ups will feel a little pain before they fire me? Do I hire someone new to my small business or just keep the staff as is? Is this the stock market dip that I should buy or should I continue to hold out because The Big One is finally coming? Or maybe I should buy and sell randomly, because everything is kind of a casino anyway, right?

Hsu said consumer sentiment is better than it was at its lowest level since mid-2022, but is still below the historical average. There are also some serious disparities in how different groups view the economy.

“People at the bottom of the income distribution are not doing nearly as well as they were two years ago,” Hsu said, “while people with higher incomes and wealthier people are doing much, much better.”

Even though the job market isn’t as great for them, those at the top of the income distribution are enjoying recent stock market gains and appreciation in their home values. Those at the bottom, on the other hand, don’t really benefit from what’s happening in the markets, and higher house prices make them poor because they’re renters.

Increasing productivity is a marathon. Vibrations are a sprint.

Some economic trends that are positive in the long term do not produce instant effects. Michael Madowitz, chief economist at the Roosevelt Institute, a progressive think tank, pointed out that worker productivity — an economic measure that looks at how much workers produce during the hours they work — is something that excites economic geeks, but not so much workers. which produce “Increasing productivity is a marathon,” he said. “The vibes are a sprint.”

Uncertainty surrounding the outcome of the 2024 election really hangs over everything. Hsu said consumers incorporate who they expect to win the election into their views of the economy. If candidate X comes out ahead in November, some will say things will be great and others will say things will be terrible; if Y comes out ahead, they will return. The race is very tight, adding to the uncertainty and anxiety surrounding the economy. Even if the election won’t immediately change the economic course of the country, it will change how people feel about it.

“With interest rates coming down and going through the election, people will probably feel better,” Peterson said. (As long as we don’t have a 2020-like situation where we don’t know the result for days and one of the candidates refuses to accept the results.)

Not to sound like a broken record here, but the economy is decent. The job market is OK, if a little slippery. Consumer spending is strong and incomes are higher than they were before the pandemic. GDP growth is likely slowing, but it doesn’t look like it’s going into recession anytime soon. There is cause for concern—pandemic savings have dried up and credit card delinquencies are on the rise—but there’s no need to declare disaster just yet.

Things kind of slow down and stall, and after a few years of strong momentum, that makes people nervous. Even a little damage is uncomfortable for everyone, and for some people, it can feel awful. We’re stuck in limbo, and that limbo just isn’t a fun place.

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.