According to a recent report by Jessia Dickler for CNBC, despite favorable economic indicators, a substantial portion of the American population believes the U.S. is in a recession. A survey conducted by Affirm found that nearly 60% of Americans think the nation is experiencing an economic downturn. This perception is largely driven by the rising costs of living and increased financial strain.

The June survey by Affirm, which included 2,000 adults, indicated that most respondents believe the recession began around March 2023 and could continue until July 2025. Vishal Kapoor, senior vice president of product at Affirm, noted that persistent inflation has heavily burdened households, leading to low confidence in the U.S. economy and a search for financial control.

Similarly, a Guardian/Harris poll from May, as mentioned in the CNBC report, showed that 56% of respondents believed the U.S. is in a recession, despite continuous growth in gross domestic product (GDP) over the past several years. The National Bureau of Economic Research defines a recession as a significant decline in economic activity lasting more than a few months and affecting the entire economy. The last official recession occurred in 2020 at the onset of the Covid-19 pandemic.

CNBC highlighted that many Americans are struggling with high prices for everyday items, leading to depleted savings and increased reliance on credit cards. Economists are puzzled by the disconnect between positive economic indicators and the public’s financial concerns.

At the CNBC Financial Advisor Summit in May, Joyce Chang, chair of global research at JPMorgan, referred to the situation as a “vibecession.” She explained that while homeowners and those with financial assets have benefited significantly, large segments of the population have been left out, contributing to the widespread perception of economic hardship.

Further evidence of financial strain includes a rise in credit card delinquencies. The New York Federal Reserve, cited by CNBC, reported that about 8.9% of credit card balances became delinquent over the past year. Additionally, an increasing number of middle-income households expect to face difficulties with debt payments in the coming months.

Featured Image via Pixabay