Why are we so bummed about the economy?

Planet Money

NPR

Business, News

4.6 • 29.8K Ratings

🗓️ 1 December 2023

⏱️ 25 minutes

🔗️ Recording | iTunes | RSS

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Summary

Would you say that you and your family are better off or worse off, financially, than you were a year ago? Do you think in 12 months we'll have good times, financially, or bad? Generally speaking, do you think now is a good time or a bad time to buy a house?

These are the kinds of questions baked into the Consumer Sentiment Index. And while the economy has been humming along surprisingly well lately, sentiment has stayed surprisingly low.

Today on the show: We are really bummed about the economy, despite the fact that unemployment and inflation are down. So, what gives? We talk to a former Fed economist trying to get to the heart of this paradox, and travel to Michigan to check in on the place where they check the vibes of the economy.

Transcript

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0:00.0	This message comes from NPR sponsor, Barclays Corporate and Investment Bank,
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0:16.4	This is Planet Money from NPR.
0:21.5	We have ourselves a proper economic mystery on our hands.
0:26.4	For like all of modern economic times, there has been this basic truth.
0:31.6	When the economy is doing well, people, they can feel that. And if the
0:35.8	economy is not doing well, well, they can feel that too.
0:39.6	It's not rocket science, but you know, it's like gravity or whatever it matters and we know this
0:45.0	because for 80 years now we have been measuring consumer sentiment quantifying
0:50.8	people's vibes about the economy.
0:53.6	But, and here is that mystery, it appears somehow, right now,
0:59.2	we have lost our ability to feel the economy, and the economists they are perplexed.
1:05.0	Yeah so no I am scratching my head.
1:07.0	Claudia Somme is an economist.
1:09.0	Used to work at the Federal Reserve was one of the advisors for
1:12.0	pandemic emergency programs like stimulus checks.
1:15.4	And for the last few years, Claudia has been carefully watching consumer sentiment.
1:20.5	Sentiment plummeted when the pandemic began.
1:24.6	No surprise, right?
1:27.0	Worst recession since the Great Depression.
	...

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