Why Americans feel so bad about the growing economy

Welcome to “Boom Session”.

This term is a combination of “boom” and “bust.” Creator Matt Stoller said the film highlights how average Americans don’t feel like they’re reaping the benefits of an economy that’s working well on paper.

Although economic output and stock markets are surging and consumers are spending big, the post-pandemic recession that many expected did not materialize. But with debt at an all-time high and many people worried about their finances, a majority of Americans mistakenly believe the country is in an economic slowdown.

“Traditionally, the economy has been very strong,” said Stoller, an antitrust advocate and research director at the American Economic Liberties Project, a nonpartisan think tank. “But the public says otherwise.”

Thematically, this is similar to the term “vibe session” popularized in 2022 to describe the disconnect between solid economic indicators and negative consumer sentiment readings coming out of the pandemic. A comparison can also be made with the “K-shaped economy.” This phrase shows how Americans feel very differently depending on their income bracket.

Stoller’s “boom session” framework is intended to bring awareness beyond opinion to the material financial hardships facing those outside the top echelons of America, he said. Putting this in context makes it easier to understand why many Americans believe the national economic engine they support is not moving them forward, Stoller said.

On the surface, Stoller said, the “boom session” theory helps explain why recent data shows that U.S. GDP growth is not correlated with improving consumer sentiment. This represents a significant change from the typical trends seen over the past 60 years.

“We’ve never seen anything like this,” said Diane Swonk, chief economist at consulting firm KPMG. “I’ve been doing this job for 40 years, and this is the first time anything like this has happened.”

Stoller and economists say the disconnect is exacerbated by the fact that inflation is not a panacea. Data shows that consumers face different price increases based on factors such as income class and geographic location.

Of all the essential goods Morgan Stanley studied from 2020 to 2025, food and housing inflation rose the most. The bank’s research found that these two categories will account for a disproportionate share of low-income consumers’ spending in 2024.

Heather Berger, an economist at Morgan Stanley, said that historically low-income people have had higher inflation rates than wealthier people. The inflation gap widens when overall price increases exceed the Federal Reserve’s 2% target, which has been about the same for the past few years, the bank said.

This cannot be dismissed as a post-pandemic anomaly. The Atlanta Fed reported earlier this year that between the second quarter of 2006 and the third quarter of 2020, food prices rose about 9% more in poor areas than in wealthy areas. Stoller said more grocery stores in underserved areas could increase competition, lower prices and, in turn, reduce the inflation gap.

“If you think about monopoly as a systemic feature of the American economy and price discrimination as a systemic feature of the American economy, it’s not that hard to jump out of there,” Stoller said. “Happy people are paid a different price than sad people.”

President Donald Trump has promoted efforts this year to lower the prices of housing and medicine. President Trump claimed last month that inflation is “virtually non-existent” in the United States, even though the latest data shows inflation above the 2% annual rate that monetary policymakers consider healthy.

Economists and investors are watching to see how affordability efforts accelerate ahead of November’s midterm elections.

Meanwhile, Elizabeth Renter, senior economist at financial education platform NerdWallet, said households are feeling less isolated than they did when pandemic stimulus was rolled out in the early 2020s. Credit card debt hit a record high of $1.28 trillion in the fourth quarter of last year, according to data released by the New York Fed last week.

High prices have been a perennial problem since the pandemic-induced inflation shock, but consumers without a financial safety net have recently focused their concerns on the job market.

Economists describe the current working environment as an “unemployment boom” and an “employment recession.” Federal Reserve Chairman Jerome Powell calls it a “low hiring, low firing” environment.

The number of job openings in December fell to its lowest level since 2020, even as the stock market rose further, data showed. High-income earners are more likely to own stocks, and economists say a continued increase in these holdings could boost confidence in the economy and boost consumer spending. Meanwhile, the rest of the country is feeling anxious as the labor market tightens.

“If you have assets that are really enjoying a high value, you feel supported,” said Joan Hsu, director of consumer research at the University of Michigan. “But a strong stock market means nothing if you don’t own the stocks.”

Federal statistics show that workers’ hourly economic output rose to a record high last year, emerging from the chaos of the pandemic. But this may be bad news for employees. The boost could be taken as a sign that artificial intelligence is significantly boosting productivity, potentially prompting companies to cut staff.

nike, Amazon and UPS This year, the company announced large-scale layoffs. The number of layoffs jumped more than 200% from December to January, according to consulting firm Challenger, Gray & Christmas.

The so-called labor share, or the share of economic output distributed to workers in the form of compensation, fell to a new low last year. Furthermore, the disparity between corporate profits and employee salaries as a percentage of GDP has widened to an all-time high. Michigan sentiment polls fell near record lows last year.

Economic growth in the third quarter of 2025 was higher than expected at 4.3%, as consumer spending remained strong despite the negative atmosphere. But Moody’s analysis shows that total spending is being driven more than ever by the top 20% of Americans. Fourth quarter GDP statistics are expected to be released on Friday.

January non-farm employment data released last week exceeded economists’ expectations, raising hopes for a stabilizing job market. However, these overall increases were primarily driven by the healthcare sector, which alone accounted for more than half of the net growth.

Nearly three-fifths of Americans believe the U.S. economy is currently in recession, broadly defined as a period of negative GDP growth for multiple quarters, according to a Guardian Harris poll conducted in December. This is an 11% increase compared to a similar survey conducted in early 2025.

A new study from Snap Finance, shared exclusively with CNBC, shows just how poor the outlook is for those at the bottom of the financial food chain.

Only about a quarter of respondents said their current financial situation was “unstable” or “very unstable,” according to data released Wednesday. But that percentage jumps to 41% for people with credit scores below 670 and 54% for households with incomes of $50,000 or less.

Snap Finance conducted a survey of more than 1,400 people in December.

This may help explain the growing skepticism towards government economic indicators. According to YouGov, fewer Americans trust federal reports on the economy than did not trust them last August, a reversal from a few months ago. In August, President Trump fired Erica McEnterfer, the former head of the Bureau of Labor Statistics, after suggesting the agency was manipulating labor market data under her leadership.

However, NerdWallet’s Renter cautioned against concluding that these reports, which aim to aggregate measurements, are unnecessary if they don’t match how individuals feel. These national datasets can help, for example, ensure that economic subsidies are properly allocated, she said.

“More than one experience can be true,” Renter says. “The economy may be doing very well, but at the same time millions of people are feeling pretty uncomfortable.”