By Abigail Ofous
Trinity Times Correspondent

Many Americans are not impressed with the state of the U.S. economy, even though unemployment is sitting at a historic low, the inflation rate is gradually declining, real wages are rising and GDP (Gross Domestic Product) growth is up.

The U.S. economy is profoundly better than it was in 2020 when the COVID-19 Pandemic wreaked havoc on the unemployment rate and disrupted supply chains sent prices soaring. 

But rising housing prices, inflation, political polarization, fear mongering and economic misinformation spread through social media populism has created a narrative that contradicts the strong economic indicators that economists typically point to.

Students at Trinity Washington University have been vocal about their negative assessment of their economic situation and believe what’s being called today’s strong economy is one that doesn’t include them.

According to the Pew Research Center, 36% of Americans view the economy as “poor” and 41% view it as “only fair.”

These contradicting figures reveal a large gap between the perception of the U.S. economy and the reality of it.

Esme Nicolas, an occupational therapy major at Trinity Washington University, believes that the economy is performing at a healthy rate. For her, this is reflected in job numbers. 

Nicolas’s view, however, does come with a few caveats.

“The economy is doing well for the high class and the middle class,” she said, “but not for someone who is in the lower class.” 

Nicolas identifies as part of that working class, which is particularly vulnerable to shifts in the costs of living, including higher food and gas prices, rising rents and elevated utilities. 

According to the World Economic Forum, inflation does not affect people equally. Americans in  “lower income households” saw inflation peak at 7.2%, which is .6% higher than more affluent American households.  

As a college student, Nicolas has not always found it easy to budget her money. 

When grocery shopping, she compares prices and always chooses the cheapest option. “I don’t really buy clothes and shoes that often,” Nicolas said. “I try to save as much money as possible, because every dollar counts.”

Stevie Mitchell,  a communications major at Trinity, views the economy differently. 

Mitchell sees it as “doing poorly” and blames President Joe Biden for not going far enough to address economic challenges. 

According to a poll conducted by Newsweek, 48% of respondents believe Biden’s economic agenda is moving the country in the wrong direction. 

Along with higher gas prices, Americans have watched food prices climb during Biden’s presidency, sometimes as high as 20%. 

Many factors affected this rate of inflation, including a worldwide pandemic and a land war in Eastern Europe, but many Americans feel like wage increases have been too slow to balance out the effects on their wallets. 

Mitchell fears that after graduation she won’t be able to find her dream job. And even if she did secure employment in her chosen field, she is unsure how long it might last.

Job security is the assurance or confidence an employee has that their current position will exist in the foreseeable future. One survey reported by Forbes found that nearly five in six respondents feared they might lose their job in 2024. 

“Everything is constantly changing,” Mitchell told Trinity Times, “and I’m expecting a change in my career path, so I’m preparing by exploring different careers.” 

Job insecurity is accompanied by high levels of anxiety. 

Lay-offs, reduced working hours, and employment loss to advancing technology add to a spirit of fear among American workers, and increases the perception of an economy in free fall. 

Mitchell hopes that in the future she will see a transformation in the economy. “I believe it will improve,” she said, “and I’m optimistic about the changes this will bring.”

Studies from the Brookings Institution offer several insights into what informs economic misperceptions.

• Economic inequality often causes people to view the economy as zero-sum, where one group’s success is perceived to come at the expense of others. 
• In both wealthy and poorer countries, belief in conspiracy theories leads people to think the economy is in decline, with a sentiment that things were once better than they are now. 
• In the U.S., political partisanship can be a more accurate predictor of economic perception than actual economic performance. 
• Households at higher risk of poverty are less likely to have a positive view of the economy, even in the face of favorable macroeconomic news.

“We are all participants in the economy every day,” said Dennis Farley, a visiting professor of Economics at Trinity.

Farley believes students must learn about the economy and how it is affecting them, which will help reduce the gap between reality and perception, adding that ECON 101 is designed to give students knowledge about basic economic principles like supply and demand, market fluctuations, and changing rates of inflation.

“The basic challenge that students face is knowing what they want to do after college,” Farley said. 

He advises students to narrow down their career paths and make educated decisions based on the realities of the economy before them.

For his part, Farley thinks the U.S. economy is doing quite well. He cites the nation’s strong Gross Domestic Product – the total value of goods and services provided in a country during a specific time period. GDP tracks the health of the country’s economy, enabling policymakers and banks to judge whether an economy is contracting or expanding, and then take appropriate action. 

In 2024, the country’s GDP increased at a healthy annual rate of 1.4% in the first quarter, according to the U.S. Bureau of Economic Analysis. 

But Farley acknowledged there is a notable perception gap for Americans who are experiencing inflation. 

“When it comes to your economic decisions,” Farley advises his students, “be adaptable and flexible. Avoid making big purchases. Focus on allocating your expenses properly. This will help you (more skillfully) manage your finances.” 

The perception gap between different economic classes is a significant issue affecting people’s lives, fears, and future planning, he said. 

It’s clear that while some may see the economy as thriving, others struggle to make ends meet. This disparity underscores the complexities of any economic landscape because seeing is not always believing.