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Recent post from a weblog I follow, "This is the Best U.S. Economy Since the 1990s": * https://awealthofcommonsense.com/2024/01/this-is-the-best-u-s-economy-si

Recent post from a weblog I follow, "This is the Best U.S. Economy Since the 1990s": * https://awealthofcommonsense.com/2024/01/this-is-the-best-u-s-economy-since-the-1990s/ https://awealthofcommonsense.com/2024/01/this-is-the-best-u-... The main pain point would probably be housing prices/costs/price-to-income rations: * https://www.jchs.harvard.edu/blog/home-price-income-ratio-reaches-record-high-0 https://www.jchs.harvard.edu/blog/home-price-income-ratio-re... Edit: also, the run-up in food prices over the last little while is not great either (this is global phenomena AFAICT, and not US-specific). Hopefully inflation stabilizing will help, and wage gains will catch up over time.

seydor 3y ago
Do Americans feel like they re in the best economy? (Here in yurop it's doom and gloom nothing like the 90s)
- ceejayoz 3y ago
  Public perception frequently doesn't match reality. Crime is a similar situation; nightly and 24/7 cable news highlight lurid cases six states away, so large swaths of the population feel unsafe despite living (statistically) in one of the safest societies ever to exist.
  - leereeves 3y ago
    Public perception matches people's experiences. That may or not match the measures that economists and rich people care about, like GDP or stock market gains. Down on main street, people are cutting back because they can no longer afford the lifestyle they used to afford. Edit: This has been discussed many times here, so I can only assume the downvoters don't care how "the other half" lives. Homes [for sale] “unaffordable” in 99% of nation for average American https://news.ycombinator.com/item?id=37708109 https://news.ycombinator.com/item?id=37708109 Housing is now unaffordable for a record half of all U.S. renters https://news.ycombinator.com/item?id=39128859 https://news.ycombinator.com/item?id=39128859 US inflation means families are spending $709 more per month than two years ago https://news.ycombinator.com/item?id=37112604 https://news.ycombinator.com/item?id=37112604 But sure, there's another perspective that sees "the Best U.S. Economy Since the 1990s".
    - gruez 3y ago
      >Public perception matches people's experiences. Going back to the crime example, was this true? People's perceptions contradicted crime statistics. Are you claiming that the crime statistics were wrong and people were somehow getting increasingly victimized?
      - sudisjensobshs 3y ago
        Many urban areas saw an increase in crime starting around 2020. When it comes to crime (especially violent), it doesn’t take much to change your perception. 1 incident you’re personally involved in is usually 1 too many. Seeing near misses doesn’t help. The economy is similar - unnecessary stuff is still accessible, but major necessities (food, housing) are worse than ever. Trends are what influence perception - and rightly so. We’re the most technically advanced we’ve ever been and we’re regressing on the important things. Negative public reaction is (unfortunately) necessary to continue our overall positive trend.
        gruez 3y ago
        >Many urban areas saw an increase in crime starting around 2020 AFAIK crime statistics do show a small uptick during the pandemic, but people thinking crime is on the rise predates that (ie. during the 2000s and 2010s, despite statistics showing otherwise).
      - rufus_foreman 3y ago
        The FBI crime reports indicate that crime went down in 2022. The National Crime Victimization Survey indicates that crime went up in 2022. For example, the FBI reports state that total violent crime went down by 2% in 2022. The victimization survey states that it went up by 75%. The victimization survey also indicates that people are reporting a smaller percentage of crime to the police.
        ceejayoz 3y ago
        See, this is a great example of how carefully selected data causes a false perception. The increase you cite is charted on https://ncvs.bjs.ojp.gov/quick-graphics https://ncvs.bjs.ojp.gov/quick-graphics. It looks like this: https://imgur.com/a/6dgFRrp https://imgur.com/a/6dgFRrp
  - edgyquant 3y ago
    A handful of our cities have the worst crime in years, places like Seattle in a generation. It’s more that statistics don’t match up with people’s experiences because they are skewed by combining entirely unrelated places together. Similarly, you can claim it’s the best economy but lots of people are not working the kind of jobs they normally would (and not just in tech) and/or are working multiple crappy jobs so unemployment rates can be deceptive when trying to understand sentiment.
- ethanbond 3y ago
  The vibes are definitely off, but mostly “things are good around here but they MUST be bad over there.” The data continues to be pretty unambiguously strong.
  - lotsofpulp 3y ago
    I think the “vibes” being off is a factor of lower perceived upward social mobility, and simultaneously higher perceived downward mobility (in the future). And it could be due to how easy it is to see and experience people who are better off than you, and “knowing” you will likely never get there, or that the rising tide will lift their boat higher than yours. And it could also be due to changing demographics, which are obviously drastic, especially due to lower fertility rates. Everyone knows changes must be coming, but exactly what changes and in what capacity are unknown.
- tcbawo 3y ago
  I get the sense that many Americans feel like they are personally doing well, but are convinced that on average, Americans are not doing well. It’s hard to tell when many numbers are used to spin/promote an ideology or attract eyeballs with sensationalist viewpoint.
  - scruple 3y ago
    > It’s hard to tell when many numbers are used to spin/promote an ideology or attract eyeballs with sensationalist viewpoint. Lies, damned lies, and statistics. It's hard to find data about how your peers are doing. Anecdotally, I know a lot of tech employees who are out of work right now and/or have been out of work for 6-12 months. I know more tech workers than I ever have before in my life, that's obviously going to come with 20 years of experience, but I've never seen such a large share of them struggling to find income -- to the point that a small number of them are moving out of the industry against their wishes.
    - ghaff 3y ago
      >a small number of them are moving out of the industry against their wishes And a larger number of which did so in the wake of dot-bomb. At least the meme that you could walk out of a job by Friday, and have 3 offers by the end of the following week just wasn't/isn't the norm in any other skilled labor profession.
- stanleykm 3y ago
  Yurop is getting kind of screwed over by a couple of wars on its periphery that are interrupting things like natural gas and shipping.
  - jeffbee 3y ago
    Europe also largely adopted the bullshit austerity policies that everyone screamed for Biden to adopt, and their economies are languishing for it.
    - throw0101d 3y ago
      I thought we were done with the "expansionary austerity" malarkey: * https://en.wikipedia.org/wiki/Expansionary_fiscal_contraction https://en.wikipedia.org/wiki/Expansionary_fiscal_contractio... It's generally a bad idea: * https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Dangerous_Idea https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Da... Certainly all-spending, all-the time isn't what one necessarily should do, as an already working economy should be left to its own devices so that government spending and fiscal room is around as a form of 'dry powder' to have when the private sector (inevitably) has a downturn.
      - eru 3y ago
        You don't need government spending and fiscal room 'dry powder': Fiscal policy is a really bad lever to pull to get the economy out of a slump. It's very wasteful, and doesn't have much of an influence. (For an example: do you remember the 'fiscal cliff' in 2013 or so? Because of some debt ceiling shenanigans the US federal government dropped spending by a lot, and virtually all pundits were predicting recession. See eg https://www.reuters.com/article/usa-fiscal-marketdeal-idCNL1E8M9BC620121109/ https://www.reuters.com/article/usa-fiscal-marketdeal-idCNL1... I can dig up more, if you need a reminder. It was all over the news. The fiscal cliff came, and despite the fiscal austerity economic growth actually accelerated.) If you have a competent central bank that's targeting inflation or nominal GDP, they will counteract whatever the fiscal side is doing. The Fed can add or remove money from the economy as they please, and thus bring total spending up or down. The best thing: they can undo mistakes. If they inject too much money, they can subsequently remove that money by selling assets off their balance sheet. That's much easier than 'unspending' on the fiscal side, which is basically impossible.
- arrrg 3y ago
  I really don’t know what weird shit is going on there because all the indicators are looking great. Even in Europe the situation isn’t all that dire … even though notably Germany was much harder hit by the Ukraine war (cutting itself loose of its gas dependency on Russia afterwards) than e.g. the US. It‘s just weird feelings based hyper cynical doom and gloom. I get that very recent inflation does feel like shit (if you actively remember paying substantially less for something just a couple months, years ago) but at some point that effect has to disappear, right? Especially given real wage growth in the US. So, yeah, people in the US. Explain yourselves. And people in Europe, explain yourselves, too. (For Germany my hypothesis is horrid political communication by the governing parties. They are doing many of the right things and lots of great things are being implemented after years of standstill but they do not manage to communicate all of that competently.)
- alephnerd 3y ago
  Ime, it's doom and gloom for people in tech and other white collar industries, but people in other industries (especially skilled ones) have become fairly positive. The loudest people on social media, especially forums like Reddit and HN, tend to skew towards people in the tech industry.
  - ghaff 3y ago
    A lot of tech is probably colored by what was truly an exceptional decade or so in roughly the 2010s. Now, layoffs at larger tech companies are not an exceptional event, many companies have tightened up on expenses and hiring, and (even if not necessarily salaries) total compensation has probably taken a nosedive in many cases. (While housing prices are still very high in certain high profile areas.)
    - alephnerd 3y ago
      Yep. Even though I myself am in tech, my family background wasn't as affluent as other people in the industry. As such, I feel a bit of Schadenfreude from people who lived with a golden spoon hyperventilating about what is by most standards a fairly normal tech market (or at least, used to be the norm before 2015-16)
      - laidoffamazon 3y ago
        I'd even say it's basically equivalent to the tech hiring market in ~2019 and 2018 when I was looking for jobs. Except offers are better (though no bidding wars like 2021)
        alephnerd 3y ago
        I can see that. Idk when the unrealistic expectations started kicking off on HN and Reddit - maybe COVID? But the market seems fairly normal scale of things outside of a couple large employers who tended to hire juniors at the expense of more experienced engineers (Google, Meta comes to mind, and some teams at Amazon), so this might be their first time in a market like this in their careers
- GartzenDeHaes 3y ago
  From my point of view, it's a booming economy for the top 10%-20%. The middle are mostly holding ground, but the bottom 10%-20% are in, or close to, a depression. Homelessness and food bank utilization are at a record high by some measures.
  - lotsofpulp 3y ago
    The data indicates the lowest quintile is gaining the most: https://www.epi.org/publication/swa-wages-2022/ https://www.epi.org/publication/swa-wages-2022/ If anything, the middle and upper middle is experiencing decreased quality of life, for example not eating out as often, because the lowest wage workers in restaurants/hotels/farms/etc are seeing wage growth.
    - GartzenDeHaes 3y ago
      That report shows an income increase of 9% from 2019 to 2022. There was a 40% currency devaluation during this time that led to the doubling of rents in most places.
      - deeg 3y ago
        The article indicates that inflation is accounted for: "Even in the face of rising prices, low-wage workers have experienced historically fast real wage growth."
  - bryanlarsen 3y ago
    The people who gain are the ones willing to change jobs; which is primarily the top and bottom 10%. Those two demographics are the ones experiencing wage gains that have outplaced inflation. The middle class who feel loyalty to their employers (like me) are the ones who aren't getting raises in line with inflation.
- jeffbee 3y ago
  The university of Michigan sentiment survey has recently seen huge increases in positivity. Some of these metrics are still pretty low, but going up. http://www.sca.isr.umich.edu/ http://www.sca.isr.umich.edu/
- mywittyname 3y ago
  I've long felt like doom & gloom is somewhat key to a strong economy. By tempering that "irrational exuberance" that leads to the development of bubbles that eventually cause recessions. To answer your question: yes, in the USA at least, consumer confidence in the economy was low through the early to mid 90s. The country had a recession in the early 90s with oil prices rising and real estate prices remained quite low throughout much of the decade. The Consumer Confidence Index throughout the 90s maps almost exactly to the CCI from 2008-2020. With lows of about 60 in 1990 & 2009 to peaks of about 140 in 1998 and 2018. Not sure about Europe though. But seeing as oil prices are global, I image y'all didn't much like the early 90s either.
  - eru 3y ago
    Bubbles don't cause recessions. However I agree that doom and gloom isn't necessarily bad. And I would also say that short sellers perform one of the most vital functions in finance. (And that's why we should encourage their activity, instead of curtailing them with ever more rules or casting them as the bad guys.) > Not sure about Europe though. But seeing as oil prices are global, I image y'all didn't much like the early 90s either. Depending on where you were in Europe at the time, you would have had much bigger fish to fry: the end of the Cold War and dissolution of the Communist Block. You would have to look at individual countries to judge the impact (eg just a quick look at real GDP per capita reveals vast differences between eg Germany, Poland and Russia during the 90s. (I grew up in (East) Germany and was aware that Russia did really badly in the 1990s. So I was a bit surprised to see that Poland's GDP per capita was on an upward trajectory almost immediately. I naively assumed they also had a painfully long and protracted transition phase. But it looks like their 'shock therapy' might have worked.) See https://en.wikipedia.org/wiki/Balcerowicz_Plan https://en.wikipedia.org/wiki/Balcerowicz_Plan
- lastofthemojito 3y ago
  I feel a bit doom-and-gloomy, mainly because I'd like to move into a bigger house as my family grew over the past few years. The problem being, I bought my current townhouse almost a decade ago and refinanced during the pandemic to an incredibly low rate. Since I would need a new mortgage to buy a new house and rates are significantly higher now, I feel like I'd end up paying twice as much per month for a marginally better house. I'd always heard that housing prices have an inverse relationship with interest rates, so if rates go up, actual housing prices should go down. In reality (so far), prices seem to be much stickier, and people just aren't listing many houses at all. So essentially I'm whining that I'm paying a shockingly low amount of interest, almost borrowing money for free, and if I take out another loan I'll actually have to pay a (historically) normal amount of interest. But it would still really hurt to make that jump, and it does feel like weird/unhealthy stuff is going on in the housing market.
  - nonameiguess 3y ago
    This is mildly amusing because I feel like I'm a great economy for effectively the same reason. I bought a downtown townhouse seven years ago at roughly half the price this neighborhood is currently going for and I'm paying 1.9% interest, on track to have the house paid off completely in another seven years despite housing expense being well under 10% of my income. I'm also expecting a kid but purchased bigger than I needed on purpose in anticipation of that. I'm sure a lot of this has to do with who you know as well. Someone further down asked if it "feels" like unemployment is really 3.7%, which seems like a silly question in a lot of ways. How something feels to you is not representative of an entire country. Personally, it "feels" like 0% unemployment to me because nobody I keep in regular contact with is unemployed, my family is mostly in skilled trades and business is booming, and my younger nieces/nephews who recently graduated college all found jobs pretty much instantly, higher paying than I'd have expected, with random ass humanities degrees and no special skills. My own company is still growing and hiring, though our parent company had layoffs. I don't know any of those people, though. But if your entire peer group is senior engineers expecting $500k salaries who worked for web companies that overhired during Covid and live in places where a family-sized house goes for at least $2 million, it probably feels more dire. Probably similar for media companies given the streaming wars are ending and they have to operate like real businesses now and actually make money. All the creatives I know have been struggling their entire lives, though, so that is nothing new.
- skywhopper 3y ago
  It feels pretty good to me, locally, but to the extent Americans don't feel that way, the months of reporting on nightmare inflation followed by months of reporting on the "100% certain impending recession" now followed by more scare pieces on grocery and fast food prices even as inflation rapidly declines hasn't helped. I'm personally seeing grocery prices actually come back down to pre-pandemic levels for some items as stores and manufacturers realize they milked the "record inflation" story too much. There were some supply constraints, but once the "inflation" story took off, lots of places raised prices way too much, thinking they could just blame inflation. But when they do it so fast that even folks in the top 10% of income start becoming price-conscious and bargain hunting, they've gone too far.
- laidoffamazon 3y ago
  No, because it's left-wing shibboleth to say everything is terrible and it's right-wing shibboleth to say everything is terrible when a Democrat is president. But, this is slowly changing and sentiment has risen for the last few months.
gustavus 3y ago
All I know is that I am able to save less, because everything costs more especially food. I know that many of my peers who are looking for work or have been let go. I know that despite the rise in interest rates housing prices have stabilized but haven't dropped. But who am I going to believe my own lying eyes or the honest upright and trustworthy government?
- throw0101d 3y ago
  > But who am I going to believe my own lying eyes or the honest upright and trustworthy government? Some people believe their own eyes and come to the conclusion that the Earth is flat. :) Edit: Downvotes? Sheesh people, lighten up. :)
oldpersonintx 3y ago
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bryanlarsen 3y ago
It's not surprising that housing is the main exception: high interest rates make housing more expensive. Demand for housing is relatively fixed (roughly proportional to the number of people) so unlike most other goods higher interest rates don't affect demand as strongly.
- throw0101d 3y ago
  > It's not surprising that housing is the main exception: high interest rates make housing more expensive. Use the slider at the URL to see different years: this has been a growing trend, and not just a recent (1-2 year) phenomena.
- usaar333 3y ago
  Interest rates only affect purchasing, not renting, at least at first order. Is purchasing demand actually fixed? I'd expect people to substitute renting for buying - I certainly do. Also note theoretically purchase prices would adjust lower with higher interest rates. However, market is highly distorted by existing holders of mortgages not being able to transfer their low interest rate mortgages to other properties or people.
- eru 3y ago
  High interest rates make house prices drop, until new mortgages are about as affordable as before. (This might be easier to understand in the reverse: low interest rates make houses prices go up until the mortgage is just as (un-) affordable as before.)
bitshiftfaced 3y ago
Wage growth is a bit misleading without factoring out inflation. In real terms: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q (Once you change the settings to YoY, the chart looks fairly unremarkable. Granted, it is only up to date to the end of last year.)
- gruez 3y ago
  > Wage growth is a bit misleading without factoring out inflation. The article literally mentions inflation right after, followed by what the real wage growth works out to. >Wages are growing at more than 5%: >insert chart here >And inflation is around 3%: >insert chart here >So we’re talking 2% real wage growth and 6% nominal economic growth. [...] I can see this being misleading if you used "Wages are growing at more than 5%" as the headline or something, but I don't think anyone is being misled unless they have the attention of a goldfish.
  - bitshiftfaced 3y ago
    Yes, we read the same article. What I'm saying is misleading is the chart itself. The chart in the article supports a totally different conclusion than an inflation-adjusted chart. It doesn't actually support "Best economy since the 90s," and yet the author included it. That in itself is misleading to me, whether or not you hedge with a quick statement about inflation afterwards.
    - gruez 3y ago
      I'm not sure how you got the impression that the article claimed "Best economy since the 90s". The claim, made right after the remark about what real wages amount to is "The current environment looks more like the 1990s economy than the 1970s.". Looking at the inflation-adjusted wage chart, I'm inclined to agree. The pandemic screwed up the YoY numbers, but the past couple of quarters do look similar to the 90s.
      - bitshiftfaced 3y ago

seydor 3y ago

Do Americans feel like they re in the best economy? (Here in yurop it's doom and gloom nothing like the 90s)

ceejayoz 3y ago
Public perception frequently doesn't match reality. Crime is a similar situation; nightly and 24/7 cable news highlight lurid cases six states away, so large swaths of the population feel unsafe despite living (statistically) in one of the safest societies ever to exist.
- leereeves 3y ago
  Public perception matches people's experiences. That may or not match the measures that economists and rich people care about, like GDP or stock market gains. Down on main street, people are cutting back because they can no longer afford the lifestyle they used to afford. Edit: This has been discussed many times here, so I can only assume the downvoters don't care how "the other half" lives. Homes [for sale] “unaffordable” in 99% of nation for average American https://news.ycombinator.com/item?id=37708109 https://news.ycombinator.com/item?id=37708109 Housing is now unaffordable for a record half of all U.S. renters https://news.ycombinator.com/item?id=39128859 https://news.ycombinator.com/item?id=39128859 US inflation means families are spending $709 more per month than two years ago https://news.ycombinator.com/item?id=37112604 https://news.ycombinator.com/item?id=37112604 But sure, there's another perspective that sees "the Best U.S. Economy Since the 1990s".
  - gruez 3y ago
    >Public perception matches people's experiences. Going back to the crime example, was this true? People's perceptions contradicted crime statistics. Are you claiming that the crime statistics were wrong and people were somehow getting increasingly victimized?
    - sudisjensobshs 3y ago
      Many urban areas saw an increase in crime starting around 2020. When it comes to crime (especially violent), it doesn’t take much to change your perception. 1 incident you’re personally involved in is usually 1 too many. Seeing near misses doesn’t help. The economy is similar - unnecessary stuff is still accessible, but major necessities (food, housing) are worse than ever. Trends are what influence perception - and rightly so. We’re the most technically advanced we’ve ever been and we’re regressing on the important things. Negative public reaction is (unfortunately) necessary to continue our overall positive trend.
      - gruez 3y ago
        >Many urban areas saw an increase in crime starting around 2020 AFAIK crime statistics do show a small uptick during the pandemic, but people thinking crime is on the rise predates that (ie. during the 2000s and 2010s, despite statistics showing otherwise).
    - rufus_foreman 3y ago
      The FBI crime reports indicate that crime went down in 2022. The National Crime Victimization Survey indicates that crime went up in 2022. For example, the FBI reports state that total violent crime went down by 2% in 2022. The victimization survey states that it went up by 75%. The victimization survey also indicates that people are reporting a smaller percentage of crime to the police.
      - ceejayoz 3y ago
        See, this is a great example of how carefully selected data causes a false perception. The increase you cite is charted on https://ncvs.bjs.ojp.gov/quick-graphics https://ncvs.bjs.ojp.gov/quick-graphics. It looks like this: https://imgur.com/a/6dgFRrp https://imgur.com/a/6dgFRrp
- edgyquant 3y ago
  A handful of our cities have the worst crime in years, places like Seattle in a generation. It’s more that statistics don’t match up with people’s experiences because they are skewed by combining entirely unrelated places together. Similarly, you can claim it’s the best economy but lots of people are not working the kind of jobs they normally would (and not just in tech) and/or are working multiple crappy jobs so unemployment rates can be deceptive when trying to understand sentiment.
ethanbond 3y ago
The vibes are definitely off, but mostly “things are good around here but they MUST be bad over there.” The data continues to be pretty unambiguously strong.
- lotsofpulp 3y ago
  I think the “vibes” being off is a factor of lower perceived upward social mobility, and simultaneously higher perceived downward mobility (in the future). And it could be due to how easy it is to see and experience people who are better off than you, and “knowing” you will likely never get there, or that the rising tide will lift their boat higher than yours. And it could also be due to changing demographics, which are obviously drastic, especially due to lower fertility rates. Everyone knows changes must be coming, but exactly what changes and in what capacity are unknown.
tcbawo 3y ago
I get the sense that many Americans feel like they are personally doing well, but are convinced that on average, Americans are not doing well. It’s hard to tell when many numbers are used to spin/promote an ideology or attract eyeballs with sensationalist viewpoint.
- scruple 3y ago
  > It’s hard to tell when many numbers are used to spin/promote an ideology or attract eyeballs with sensationalist viewpoint. Lies, damned lies, and statistics. It's hard to find data about how your peers are doing. Anecdotally, I know a lot of tech employees who are out of work right now and/or have been out of work for 6-12 months. I know more tech workers than I ever have before in my life, that's obviously going to come with 20 years of experience, but I've never seen such a large share of them struggling to find income -- to the point that a small number of them are moving out of the industry against their wishes.
  - ghaff 3y ago
    >a small number of them are moving out of the industry against their wishes And a larger number of which did so in the wake of dot-bomb. At least the meme that you could walk out of a job by Friday, and have 3 offers by the end of the following week just wasn't/isn't the norm in any other skilled labor profession.
stanleykm 3y ago
Yurop is getting kind of screwed over by a couple of wars on its periphery that are interrupting things like natural gas and shipping.
- jeffbee 3y ago
  Europe also largely adopted the bullshit austerity policies that everyone screamed for Biden to adopt, and their economies are languishing for it.
  - throw0101d 3y ago
    I thought we were done with the "expansionary austerity" malarkey: * https://en.wikipedia.org/wiki/Expansionary_fiscal_contraction https://en.wikipedia.org/wiki/Expansionary_fiscal_contractio... It's generally a bad idea: * https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Dangerous_Idea https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Da... Certainly all-spending, all-the time isn't what one necessarily should do, as an already working economy should be left to its own devices so that government spending and fiscal room is around as a form of 'dry powder' to have when the private sector (inevitably) has a downturn.
    - eru 3y ago
      You don't need government spending and fiscal room 'dry powder': Fiscal policy is a really bad lever to pull to get the economy out of a slump. It's very wasteful, and doesn't have much of an influence. (For an example: do you remember the 'fiscal cliff' in 2013 or so? Because of some debt ceiling shenanigans the US federal government dropped spending by a lot, and virtually all pundits were predicting recession. See eg https://www.reuters.com/article/usa-fiscal-marketdeal-idCNL1E8M9BC620121109/ https://www.reuters.com/article/usa-fiscal-marketdeal-idCNL1... I can dig up more, if you need a reminder. It was all over the news. The fiscal cliff came, and despite the fiscal austerity economic growth actually accelerated.) If you have a competent central bank that's targeting inflation or nominal GDP, they will counteract whatever the fiscal side is doing. The Fed can add or remove money from the economy as they please, and thus bring total spending up or down. The best thing: they can undo mistakes. If they inject too much money, they can subsequently remove that money by selling assets off their balance sheet. That's much easier than 'unspending' on the fiscal side, which is basically impossible.
arrrg 3y ago
I really don’t know what weird shit is going on there because all the indicators are looking great. Even in Europe the situation isn’t all that dire … even though notably Germany was much harder hit by the Ukraine war (cutting itself loose of its gas dependency on Russia afterwards) than e.g. the US. It‘s just weird feelings based hyper cynical doom and gloom. I get that very recent inflation does feel like shit (if you actively remember paying substantially less for something just a couple months, years ago) but at some point that effect has to disappear, right? Especially given real wage growth in the US. So, yeah, people in the US. Explain yourselves. And people in Europe, explain yourselves, too. (For Germany my hypothesis is horrid political communication by the governing parties. They are doing many of the right things and lots of great things are being implemented after years of standstill but they do not manage to communicate all of that competently.)
alephnerd 3y ago
Ime, it's doom and gloom for people in tech and other white collar industries, but people in other industries (especially skilled ones) have become fairly positive. The loudest people on social media, especially forums like Reddit and HN, tend to skew towards people in the tech industry.
- ghaff 3y ago
  A lot of tech is probably colored by what was truly an exceptional decade or so in roughly the 2010s. Now, layoffs at larger tech companies are not an exceptional event, many companies have tightened up on expenses and hiring, and (even if not necessarily salaries) total compensation has probably taken a nosedive in many cases. (While housing prices are still very high in certain high profile areas.)
  - alephnerd 3y ago
    Yep. Even though I myself am in tech, my family background wasn't as affluent as other people in the industry. As such, I feel a bit of Schadenfreude from people who lived with a golden spoon hyperventilating about what is by most standards a fairly normal tech market (or at least, used to be the norm before 2015-16)
    - laidoffamazon 3y ago
      I'd even say it's basically equivalent to the tech hiring market in ~2019 and 2018 when I was looking for jobs. Except offers are better (though no bidding wars like 2021)
      - alephnerd 3y ago
        I can see that. Idk when the unrealistic expectations started kicking off on HN and Reddit - maybe COVID? But the market seems fairly normal scale of things outside of a couple large employers who tended to hire juniors at the expense of more experienced engineers (Google, Meta comes to mind, and some teams at Amazon), so this might be their first time in a market like this in their careers
GartzenDeHaes 3y ago
From my point of view, it's a booming economy for the top 10%-20%. The middle are mostly holding ground, but the bottom 10%-20% are in, or close to, a depression. Homelessness and food bank utilization are at a record high by some measures.
- lotsofpulp 3y ago
  The data indicates the lowest quintile is gaining the most: https://www.epi.org/publication/swa-wages-2022/ https://www.epi.org/publication/swa-wages-2022/ If anything, the middle and upper middle is experiencing decreased quality of life, for example not eating out as often, because the lowest wage workers in restaurants/hotels/farms/etc are seeing wage growth.
  - GartzenDeHaes 3y ago
    That report shows an income increase of 9% from 2019 to 2022. There was a 40% currency devaluation during this time that led to the doubling of rents in most places.
    - deeg 3y ago
      The article indicates that inflation is accounted for: "Even in the face of rising prices, low-wage workers have experienced historically fast real wage growth."
- bryanlarsen 3y ago
  The people who gain are the ones willing to change jobs; which is primarily the top and bottom 10%. Those two demographics are the ones experiencing wage gains that have outplaced inflation. The middle class who feel loyalty to their employers (like me) are the ones who aren't getting raises in line with inflation.
jeffbee 3y ago
The university of Michigan sentiment survey has recently seen huge increases in positivity. Some of these metrics are still pretty low, but going up. http://www.sca.isr.umich.edu/ http://www.sca.isr.umich.edu/
mywittyname 3y ago
I've long felt like doom & gloom is somewhat key to a strong economy. By tempering that "irrational exuberance" that leads to the development of bubbles that eventually cause recessions. To answer your question: yes, in the USA at least, consumer confidence in the economy was low through the early to mid 90s. The country had a recession in the early 90s with oil prices rising and real estate prices remained quite low throughout much of the decade. The Consumer Confidence Index throughout the 90s maps almost exactly to the CCI from 2008-2020. With lows of about 60 in 1990 & 2009 to peaks of about 140 in 1998 and 2018. Not sure about Europe though. But seeing as oil prices are global, I image y'all didn't much like the early 90s either.
- eru 3y ago
  Bubbles don't cause recessions. However I agree that doom and gloom isn't necessarily bad. And I would also say that short sellers perform one of the most vital functions in finance. (And that's why we should encourage their activity, instead of curtailing them with ever more rules or casting them as the bad guys.) > Not sure about Europe though. But seeing as oil prices are global, I image y'all didn't much like the early 90s either. Depending on where you were in Europe at the time, you would have had much bigger fish to fry: the end of the Cold War and dissolution of the Communist Block. You would have to look at individual countries to judge the impact (eg just a quick look at real GDP per capita reveals vast differences between eg Germany, Poland and Russia during the 90s. (I grew up in (East) Germany and was aware that Russia did really badly in the 1990s. So I was a bit surprised to see that Poland's GDP per capita was on an upward trajectory almost immediately. I naively assumed they also had a painfully long and protracted transition phase. But it looks like their 'shock therapy' might have worked.) See https://en.wikipedia.org/wiki/Balcerowicz_Plan https://en.wikipedia.org/wiki/Balcerowicz_Plan
lastofthemojito 3y ago
I feel a bit doom-and-gloomy, mainly because I'd like to move into a bigger house as my family grew over the past few years. The problem being, I bought my current townhouse almost a decade ago and refinanced during the pandemic to an incredibly low rate. Since I would need a new mortgage to buy a new house and rates are significantly higher now, I feel like I'd end up paying twice as much per month for a marginally better house. I'd always heard that housing prices have an inverse relationship with interest rates, so if rates go up, actual housing prices should go down. In reality (so far), prices seem to be much stickier, and people just aren't listing many houses at all. So essentially I'm whining that I'm paying a shockingly low amount of interest, almost borrowing money for free, and if I take out another loan I'll actually have to pay a (historically) normal amount of interest. But it would still really hurt to make that jump, and it does feel like weird/unhealthy stuff is going on in the housing market.
- nonameiguess 3y ago
  This is mildly amusing because I feel like I'm a great economy for effectively the same reason. I bought a downtown townhouse seven years ago at roughly half the price this neighborhood is currently going for and I'm paying 1.9% interest, on track to have the house paid off completely in another seven years despite housing expense being well under 10% of my income. I'm also expecting a kid but purchased bigger than I needed on purpose in anticipation of that. I'm sure a lot of this has to do with who you know as well. Someone further down asked if it "feels" like unemployment is really 3.7%, which seems like a silly question in a lot of ways. How something feels to you is not representative of an entire country. Personally, it "feels" like 0% unemployment to me because nobody I keep in regular contact with is unemployed, my family is mostly in skilled trades and business is booming, and my younger nieces/nephews who recently graduated college all found jobs pretty much instantly, higher paying than I'd have expected, with random ass humanities degrees and no special skills. My own company is still growing and hiring, though our parent company had layoffs. I don't know any of those people, though. But if your entire peer group is senior engineers expecting $500k salaries who worked for web companies that overhired during Covid and live in places where a family-sized house goes for at least $2 million, it probably feels more dire. Probably similar for media companies given the streaming wars are ending and they have to operate like real businesses now and actually make money. All the creatives I know have been struggling their entire lives, though, so that is nothing new.
skywhopper 3y ago
It feels pretty good to me, locally, but to the extent Americans don't feel that way, the months of reporting on nightmare inflation followed by months of reporting on the "100% certain impending recession" now followed by more scare pieces on grocery and fast food prices even as inflation rapidly declines hasn't helped. I'm personally seeing grocery prices actually come back down to pre-pandemic levels for some items as stores and manufacturers realize they milked the "record inflation" story too much. There were some supply constraints, but once the "inflation" story took off, lots of places raised prices way too much, thinking they could just blame inflation. But when they do it so fast that even folks in the top 10% of income start becoming price-conscious and bargain hunting, they've gone too far.
laidoffamazon 3y ago
No, because it's left-wing shibboleth to say everything is terrible and it's right-wing shibboleth to say everything is terrible when a Democrat is president. But, this is slowly changing and sentiment has risen for the last few months.

gustavus 3y ago

All I know is that I am able to save less, because everything costs more especially food. I know that many of my peers who are looking for work or have been let go. I know that despite the rise in interest rates housing prices have stabilized but haven't dropped. But who am I going to believe my own lying eyes or the honest upright and trustworthy government?

throw0101d 3y ago
> But who am I going to believe my own lying eyes or the honest upright and trustworthy government? Some people believe their own eyes and come to the conclusion that the Earth is flat. :) Edit: Downvotes? Sheesh people, lighten up. :)

oldpersonintx 3y ago

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bryanlarsen 3y ago

It's not surprising that housing is the main exception: high interest rates make housing more expensive. Demand for housing is relatively fixed (roughly proportional to the number of people) so unlike most other goods higher interest rates don't affect demand as strongly.

throw0101d 3y ago
> It's not surprising that housing is the main exception: high interest rates make housing more expensive. Use the slider at the URL to see different years: this has been a growing trend, and not just a recent (1-2 year) phenomena.
usaar333 3y ago
Interest rates only affect purchasing, not renting, at least at first order. Is purchasing demand actually fixed? I'd expect people to substitute renting for buying - I certainly do. Also note theoretically purchase prices would adjust lower with higher interest rates. However, market is highly distorted by existing holders of mortgages not being able to transfer their low interest rate mortgages to other properties or people.
eru 3y ago
High interest rates make house prices drop, until new mortgages are about as affordable as before. (This might be easier to understand in the reverse: low interest rates make houses prices go up until the mortgage is just as (un-) affordable as before.)

bitshiftfaced 3y ago

Wage growth is a bit misleading without factoring out inflation. In real terms: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q (Once you change the settings to YoY, the chart looks fairly unremarkable. Granted, it is only up to date to the end of last year.)

gruez 3y ago
> Wage growth is a bit misleading without factoring out inflation. The article literally mentions inflation right after, followed by what the real wage growth works out to. >Wages are growing at more than 5%: >insert chart here >And inflation is around 3%: >insert chart here >So we’re talking 2% real wage growth and 6% nominal economic growth. [...] I can see this being misleading if you used "Wages are growing at more than 5%" as the headline or something, but I don't think anyone is being misled unless they have the attention of a goldfish.
- bitshiftfaced 3y ago
  Yes, we read the same article. What I'm saying is misleading is the chart itself. The chart in the article supports a totally different conclusion than an inflation-adjusted chart. It doesn't actually support "Best economy since the 90s," and yet the author included it. That in itself is misleading to me, whether or not you hedge with a quick statement about inflation afterwards.
  - gruez 3y ago
    I'm not sure how you got the impression that the article claimed "Best economy since the 90s". The claim, made right after the remark about what real wages amount to is "The current environment looks more like the 1990s economy than the 1970s.". Looking at the inflation-adjusted wage chart, I'm inclined to agree. The pandemic screwed up the YoY numbers, but the past couple of quarters do look similar to the 90s.
    - bitshiftfaced 3y ago