Analyzing the Collision Between Economic Indicators and Public Opinion

Since the COVID-19 pandemic hit, the story of America's economic recovery has been like watching two different movies at the same time.

by Faruk Imamovic
Analyzing the Collision Between Economic Indicators and Public Opinion
© Getty Images/Spencer Platt

Since the COVID-19 pandemic hit, the story of America's economic recovery has been like watching two different movies at the same time. On one hand, we've got all these official numbers showing businesses booming and people spending money – it looks like we're bouncing back strong.

But then, when you listen to what people are saying in surveys and polls, it's a whole other vibe. A lot of folks are actually feeling pretty down about the economy. This split view is really throwing a wrench in the works for the people trying to steer us in the right direction, making it clear we've got to dig a little deeper to understand what's really going on.

The Tale of Hard and Soft Data

Getting to the heart of how the American economy is doing means looking at two different kinds of information. First, there's "hard data" – the solid numbers like how fast our economy is growing or how many people are finding jobs.

These numbers are telling us good news: the economy is picking up again after the pandemic knocked it down. We're seeing especially good things happening for folks in lower-paying jobs and those on the front lines, with more work opportunities helping to give the economy a boost.

But then there's "soft data," which is all about how people are feeling about the economy and what they expect to happen next. And here's where things take a turn – even though the hard numbers look good, a lot of Americans aren't feeling too hopeful.

They're worried and doubtful about where things are headed. This difference between the cold, hard facts and people's feelings isn't just something for economists to scratch their heads over; it's super important for making decisions about what the government should do to help the economy.

Economic Pessimism in the Face of Growth

It's really surprising how different people's feelings about the economy are from what the numbers say. Even though jobs are coming back and people are spending more, a lot of Americans still feel pretty gloomy about where things are heading.

It makes you wonder why there's such a big difference between what's actually happening and how people feel about it. A big part of the problem is that we're not getting the full picture from surveys anymore. Fewer folks are taking the time to answer them, so the overall mood we're getting might not truly reflect how everyone is feeling.

This is especially true for people in lower-paying jobs or those working on the front lines, who might actually be feeling a bit more hopeful because they're seeing some real improvements in their lives. But their voices aren't being heard as loudly, and that can make it seem like everyone is just unhappy, which isn't the whole story.

The Impact of Non-Response on Economic Surveys

Getting a good read on how people feel about the economy is getting tougher because a lot of Americans just aren't that into answering surveys anymore. When fewer people take part, it's hard to be sure if what we're hearing really matches up with how everyone's feeling.

It's like if we end up hearing mostly from one type of person, or folks from just one part of the country, then the big picture we get might not be right. This problem of not everyone chiming in can really throw us off. Imagine trying to figure out the most popular NFL team but only hearing from fans in one city.

Obviously, you're going to end up with a pretty one-sided view. That's kind of what's happening with our economy talks. We might end up focusing on the wrong issues or making decisions based on what only a few people think, which isn't great for anyone.

Wall Street© Getty Images/Michael M. Santiago

Understanding and Addressing Economic Divergence

The difference between the solid facts and people's feelings about the US economy shows just how complicated things are as we try to bounce back from the pandemic.

It's a wake-up call for those in charge to really listen and get a better grasp of how different groups of people are doing. To get a clearer picture, we need to make sure our surveys reach more people and reflect everyone's experiences.

This means we've got to make our surveys better and smarter, so everyone feels included, and then we've got to be really careful about understanding what the answers are telling us, especially if some folks' voices are coming through louder than others.

The Real-World Consequences of Economic Discrepancies

The gap between what the economy's numbers say and how people feel about it isn't just something for scholars to puzzle over. It really matters when it comes to making and shaping economic policies.

When surveys don't fully capture what's happening for folks with lower incomes or those working on the front lines, the people in charge might get the wrong idea about how well their plans are working. This oversight can lead to continuing the same old strategies that don't really help the people who often get overlooked or left out when the economy starts to pick up again.

Bridging the Data Divide

Fixing the mismatch between the positive signs we're seeing in the economy and the worry many people still feel isn't easy, but it's definitely something we can tackle. First off, we need to get more people answering surveys.

If we can hear from a wider variety of folks, we'll get a better sense of how everyone really feels about the economy. This could mean making surveys easier to take with new tech or making sure people know their information is safe.

Also, it's super important to tweak how we do surveys so we don't just hear from the same types of people all the time. Recognizing and adjusting for this tilt in responses helps make sure we're getting the real scoop on what people think and feel about their economic situation.

Doing this isn't just about getting the numbers right; it's about making sure everyone's voice matters, especially those who don't often get to be heard.

Policy Implications and Future Directions

The issue of different stories being told by hard numbers and people's feelings isn't just something for experts to debate—it hits right at the heart of making smart economic policies.

When decision-makers get a skewed view of how things are going, they might end up making choices that don't really help everyone. Like, if there's too much focus on fighting inflation because wealthier folks are worried about it, we might miss out on really important stuff like creating more jobs or boosting pay for people who aren't making as much.

To get this right, we need to look at the big picture in a smarter way, using both the hard facts and what people are saying about their own lives. By paying attention to how well the job market is doing, especially for those earning less, we can make policies that really make a difference.

This way, we're not just growing the economy for the sake of numbers; we're making sure everyone gets a fair share of the good stuff that comes with recovery.