Is US really in a recession? More than half of Americans think so - Hindustan Times
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Is US really in a recession? More than half of Americans think so

May 24, 2024 08:00 AM IST

Americans perceive US in recession, attribute economic challenges to Biden. Inflation and cost of living major worries, despite GDP growth.

More than half of Americans think that the United States is in an economic recession, despite the fact that gross domestic product (GDP) has been increasing for the last couple of years.

Money-market fund assets rose as elevated short-term rates continued to lure funds, even after recent economic data suggests the Federal Reserve could ease monetary policy this year. Photographer: Al Drago/Bloomberg(Bloomberg)
Money-market fund assets rose as elevated short-term rates continued to lure funds, even after recent economic data suggests the Federal Reserve could ease monetary policy this year. Photographer: Al Drago/Bloomberg(Bloomberg)

A new Guardian/Harris poll revealed that 56% of the respondents affirmed that the country is presently in a recession, with 58% of the respondents pinning the blamed on the current US president, Joe Biden.

Fact check: US is definitively not in a recession

In the first quarter of 2024, GDP grew by 1.6%. Although this represents a deceleration from the 3.3% growth seen in the fourth quarter of 2023. Plus, US GDP growth has been outpacing that of other developed nations.

“America has the best economy in the world,” President Biden told NBC in April.

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Bigger picture shows inflation and the higher cost of living

The larger picture suggests that inflation and the rising cost of living—factors not typically considered in the National Bureau of Economic Research (NBER) recession determinations—are influencing Americans' views.

According to the poll, 70% of Americans cited the cost of living as their biggest economic concern, followed by inflation at 68%.

Two-thirds of Americans, including 65% of Democrats, reported difficulty in being optimistic about positive economic news due to financial pressures experienced each month.

Although the rate of inflation has slowed since its peak in 2022, it remains higher than what most Americans are accustomed to, with prices significantly elevated compared to 2019 levels. The poll reveals that 55% of Americans incorrectly believe that the U.S. economy is shrinking this year rather than growing, and 49% think the S&P 500 is down for the year, despite it being up.

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However, 64% of Americans say they do not know whom to trust for accurate information about the economy, even when economic information is accurately reported, 62% of Americans believe that the economy is worse than the media portrays it to be.

Despite positive indicators suggesting that the economy is recovering from the pandemic-induced disruptions to supply chains and the surge in inflation, consumer attitudes remain pessimistic.

The Guardian/Harris poll comes at a time, less than six months before the November election, where Biden will face former President Donald Trump.

The Biden campaign is working to persuade voters of the president’s economic achievements and to shift public perception to recognize the economic progress made since the pandemic.

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“We know our work is not done,” White House Press Secretary Karine Jean-Pierre said at a January briefing, acknowledging the discrepancy between the positive economic indicators and the public’s negative perception of the economy.

Jacklyn Cooney, a research manager at Harris, told Axios, “Americans have perception gaps around the economy.”

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