Economists are perplexed at the bad vibes economy.
What the data says about how we’re doing is not aligned with what public sentiment is right now, and people are trying to figure out why.
Well, the answer is it’s a culture thing.
Even though wages have outperformed inflation in 2023 and cumulatively since 2019, they have, people don’t feel like that’s the case.
Why? Because in 2021 and 2022, we just did not keep up with inflation and everything, got more expensive, gas got more expensive, houses got more expensive, food got more expensive.
Toilet paper got more expensive, and that was an experience.
That experience led us to the belief that we are not able to afford our lives, and that is leading us to take certain action, which is lamenting on social media, making fear-based financial decisions, etcetera.
So what’s going on is we are reacting emotionally to an experience rather than logically to the data.
And that’s actually the way people work.
If data was all we needed to change our beliefs and our actions, then we would all be working out twice a day and eating vegetables all day long.
But the data doesn’t convince us to take new action experiences, which lead to beliefs are what drive our actions.
That is why we’ve got bad vibes, economy.