If you ask around, you’d find out that Americans generally think the economy is crap. For the week ended October 12, Gallup’s U.S. Economic Confidence Index rose to an uninspiring -10, its highest score all year but still reeking of the economic malaise that seems to have settled over the country. The survey shows that just 22 percent of Americans think the economy is “excellent” or “good” while 30 percent think the economy is “poor”. And to rub salt in the wound, a 53 percent majority of Americans believe things are getting worse.
This pessimism is not unfounded. U.S. policymakers barely dodged the bullet during the financial crisis. Whatever victories may have been won by the TARP program or by the Federal Reserve’s unprecedented monetary strategy have felt Pyrrhic, as big business have returned to record profitability while Main Street incomes have remained flat, or worse, shrank. For millions of Americans, the Great Recession isn’t over yet.
At the heart of the issue is jobs. Both fiscal and monetary policymakers have focused on the labor market, determined to put the 8.8 million Americans who lost their jobs during the financial crisis back to work. And to that end progress has been made. The Bureau of Labor Statistics reported in early October that nonfarm payrolls increased by 248,000 in September and headline unemployment rate fell to 5.9 percent. The Obama Administration boasts 10.3 million private sector jobs added since the president took office in 2008.
But labor market data is opaque, and just because we think we see a peak doesn’t mean we’re done climbing. Long-term unemployment is still an outsized problem and income inequality is as severe as ever; according to a MoneyRates.com survey, only 40 percent of Americans feel “highly confident” in their job security, and about half of Americans expect the same or lower wages for 2014.
So what, really, is going on?