65% of Americans View the Economy as Bad, What Does This Mean for Investors?

A CBS News Poll (YouGov) released on July 30, 2023 revealed findings of interest: 61% of Americans view the economy as struggling, 56% view it as uncertain, and 36% view it as unfair. 65% view the economy as bad. You can read the article here, along with the report.

We can look at market and economic statistics all day long, but sentiment is likewise crucial to consider. What we’re seeing here is the impact of entrenched inflation where overall prices remain higher. The majority believe that their wages aren’t keeping up with rising prices, thus, they are falling behind because what they earn doesn’t have the same purchasing power. Yes, unemployment is very low, but wage growth isn’t keeping pace. Many cite the effect of interest rates as a net negative, directly impacting the budget on a day-to-day basis.

The article includes insights on how people feel Biden is doing, along with thoughts about how his policies and that of the Fed are working. You can read this for yourself. I think it is important to consider that at the end of the day, people care the most about the economy and crime as data suggests. With 65% of American adults thinking the economy is “very bad,” along with crime in cities increasing with some amount of sprawl, even if market statistics have been relatively solid, these perceptions matter.

I know as I talk to others as I must do in my role, many do cite concern and a feeling of instability to downright fear. I notice in the statistics that it might be that not enough Americans are really in touch with what is leading to the experience of a “very bad” economy where there just isn’t enough money to go around.

Causation is complicated in this case. I maintain that unpredictable events, leverage far beyond what the economy can really handle, the lack of decent wage growth in line with entrenched inflation, the Fed’s late actions and the zero-rate environment for too long - all matter. With inflation, it isn’t the thing to do to spend as the current administration has - this is a causation as well. I refer you back to the insight I shared back in May about recognizing the flaws in our financial system, click here if you haven’t had a chance to read it.

I believe that critical thinking, asking lots of questions, and really becoming informed citizens about what policy is leading to what result is essential. We can’t turn our power over to the hands of fate or arguably those that really could care less about the average American. A lot is on the line. I believe Americans deserve to have a better feel good than is currently the case.

Please let me know if you’d like to go deeper into any of these issues. If you’d like me to write on a topic that interests you, I welcome ideas and as you all know, I love to research from many sources, distilling the information in a simple manner. I hope you find this content useful.

The message to investors is hope for the best, take comfort in areas of the market and economy we can (shared in the August 2023 insights), yet have a cautionary eye to what’s coming next, especially with potential funny business a factor as we roll into the next presidential election. Huxley maintained that we don’t learn from the important lessons history has to teach, looking back at the last 3 years can certainly be informative, and the kind of informative where this next go around, we can all be far more informed - with any luck!