It seems that whenever someone in this sub brings up declining sentiment about the economy and American’s sense of financial well being, like a “k shaped economy,” commenters will dismiss it and state that economic statistics suggest people are getting wealthier and are better off, and end it right there, basically dismissing those complaints. Why is that the case on this sub, and is this sentiment common among economists in real life? Sorry if this is hyperbolic but that’s what it feels like when scrolling through this subreddit.
Do economists generally not care about American’s perception and sentiments surrounding the economy?
byu/cemeteryshade inAskEconomics
Posted by cemeteryshade
1 Comment
1. Of course we care. We capture sentiment indices. [Here](https://www.sca.isr.umich.edu) and [here](https://www.conference-board.org/topics/consumer-confidence/) are major ones.
2. Research has been done about the link between consumer sentiment and economic data. Turns out most people are relatively statistically illiterate; they either woefully misestimate some measures, or don’t act like their feelings (https://www.federalreserve.gov/econres/notes/feds-notes/tracking-consumer-sentiment-versus-how-consumers-are-doing-based-on-verified-retail-purchases-20250424.html?utm_campaign=americans-feel-broke-but-their-spending-says-otherwise&utm_medium=referral&utm_source=www.openingbelldailynews.com).
3. Given that there is much less of a link between perception and reality, the best objective measure is data. And the data don’t really show a K-shaped economy. At least not consistently. https://www.minneapolisfed.org/article/2026/have-us-consumers-gone-k-shaped-a-review-of-the-data
4. Plenty of us do nod to the “vibecession”, but using the Reddit echo board as confirmation is selection bias at its very basic.