U.S. consumer sentiment has leaped to its highest level in six years, with the Thomson Reuters/University of Michigan index released Friday showing a reading of 85.1 in July 2013, up a point versus June 2013 and 13 points higher than a year ago. But Americans aren’t as upbeat as one might think, according to the Pew Research Center, even though U.S. unemployment is down, the stock market is up and inflation remains under wraps.
Indeed, most consumers are still feeling pretty lousy about the economy these days. Why? Because, according to Pew, macro factors such as tame inflation and modest GDP growth just aren’t making up for what most people experience on a daily basis.
“At the level where most people actually live their lives, what improvement there’s been hasn’t erased the Great Recession’s sting,” says Drew DeSilver, a Pew senior writer, in “5 reasons Americans have the economic blahs,” published on Thursday.
Pointing to a Pew Research survey of 1,480 adults conducted last week, DeSilver writes that 45% of Americans rate the national economy as “only fair” while 37% call its condition “poor” and only 17% are willing to say the economy is in “excellent” or “good” shape. (The survey also finds that President Barack Obama’s overall job rating, which was more positive than negative in May and June, is now evenly divided, with 46% approving of his job performance while 46% disapprove. Congress, too, comes in for a beating, with only 21% of Americans giving lawmakers a favorable rating.)
Keep reading for Pew’s look at what it calls the “real-world” economy and five sometimes overlooked but possibly more revealing indicators about why your clients and Americans in general might have such persistently glum attitudes.
Here are the five reasons why the Pew Research Center says Americans still feel “meh” about the U.S. economy:
1) Home Ownership.
The residential real estate market regained some strength this year, but here’s what can be overlooked amid the excitement around rising home prices: home ownership is now down to levels not seen in almost 20 years.
“Home ownership was on the rise well before the mortgage mania of the mid-2000s, aided by falling interest rates and government policies designed to encourage it,” DeSilver of the Pew Research Center writes. “But the bursting of the bubble and the wrenching recession that followed forced tens, if not hundreds, of thousands of families to lose their homes; home ownership now is down to levels not seen since the mid-1990s.”
2) Employment to Population Ratio
This ratio, also called the employment rate, does a better job of measuring how many employed adults there are as a share of the total “civilian noninstitutional” population, and Pew breaks out just the 25- to 54-year-old cohort to gauge how many Americans are working full time, excluding most students and retirees.
When looking at that ratio as opposed to the unemployment rate, Pew senior writer Drew DeSilver finds that the news isn’t good.
“Despite some recent improvement, the June employment rate of 75.9% is still well below pre-recession levels, which typically were close to or above 80%,” he writes. “And the flatness in the rate indicates the economy isn’t doing much more than adding enough jobs to keep up with population growth.”