Crisis of Confidence
By PAUL KRUGMAN
New York Times
The Survey Research Center of the University of Michigan has been tracking American economic perceptions since the 1950s. On Friday the center released its latest estimate of the consumer sentiment index — and it was a stunner. Americans are more pessimistic about their situation than they have been for more than a quarter century.
Meanwhile, a recent Pew report found that the percentage of Americans saying that they’re better off than they were five years ago is at its lowest level in 44 years of polling.
What’s striking about this bleak mood is that by the usual measures the economy isn’t doing that badly — at least not yet. In particular, the official unemployment rate of 5.1 percent, though rising, is still fairly low by historical standards. Yet economic attitudes are worse now than they were in 1992, when the average unemployment rate was 7.5 percent.
Why are we feeling so down?
Our bleakness partly reflects the fact that most Americans are doing considerably worse than the usual economic measures let on. The official unemployment rate may be relatively low — but the percentage of prime-working-age Americans without jobs, which isn’t the same thing, is historically high. Gross domestic product is up, but the inflation-adjusted income of the median family is probably lower than it was in 2000.
(Continued here.)
New York Times
The Survey Research Center of the University of Michigan has been tracking American economic perceptions since the 1950s. On Friday the center released its latest estimate of the consumer sentiment index — and it was a stunner. Americans are more pessimistic about their situation than they have been for more than a quarter century.
Meanwhile, a recent Pew report found that the percentage of Americans saying that they’re better off than they were five years ago is at its lowest level in 44 years of polling.
What’s striking about this bleak mood is that by the usual measures the economy isn’t doing that badly — at least not yet. In particular, the official unemployment rate of 5.1 percent, though rising, is still fairly low by historical standards. Yet economic attitudes are worse now than they were in 1992, when the average unemployment rate was 7.5 percent.
Why are we feeling so down?
Our bleakness partly reflects the fact that most Americans are doing considerably worse than the usual economic measures let on. The official unemployment rate may be relatively low — but the percentage of prime-working-age Americans without jobs, which isn’t the same thing, is historically high. Gross domestic product is up, but the inflation-adjusted income of the median family is probably lower than it was in 2000.
(Continued here.)
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