The numbers were good, but feelings were bad: The US economy in 2024

Summary

Consider This from NPR: The Numbers Were Good, but Feelings Were Bad - The US Economy in 2024

Release Date: December 23, 2024

In the latest episode of NPR's "Consider This," host Scott Detrow delves into the complex landscape of the US economy as 2024 comes to a close. Despite robust economic indicators, a significant portion of Americans continues to grapple with financial strain and dissatisfaction. This summary captures the episode's key discussions, insights, and conclusions, incorporating notable quotes and providing a comprehensive overview for those who haven't tuned in.

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1. A Dichotomy Between Economic Data and Public Sentiment

The episode opens with an overview of the US economy's impressive performance in 2024. Objective measures indicate strong growth and stability:

• GDP Growth: The US GDP expanded at an annual rate exceeding 3% in late summer and early fall, a figure lauded by The Economist as making the United States "the envy of the world."

• Employment: Approximately 2 million jobs were added over the year, and unemployment rates remained low across much of the country.

• Inflation and Wages: Inflation rates have decreased, and real wages have risen, enhancing workers' purchasing power.

However, these positive metrics starkly contrast with the lived experiences of many Americans. A recent Associated Press survey revealed that two-thirds of respondents view the US economy as poor, highlighting a pervasive sense of economic unease despite favorable statistics.

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2. Insights from Economic Leaders

Jerome Powell, Federal Reserve Chairman, offers a global perspective on the US economic standing:

Jerome Powell [01:10]: "The US Economy has just been remarkable. When we in these international meetings that I attend, this has been the story how well the US is doing. If you look around the world, there's just a lot of slow growth and continued struggles with inflation."

Powell acknowledges the impressive performance but also recognizes the significant pain caused by inflationary pressures, particularly in essential areas like food and transportation.

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3. The Human Side of Economic Struggles

Contrasting the positive economic indicators are the voices of ordinary Americans who feel the pinch of high living costs:

Sydney Siner, a retired autoworker from Lynchburg, Virginia, shares her family's financial challenges:

Sydney Siner [01:41]: "I just think people are working harder than ever. I know both of my sons and my daughter-in-laws. Everybody's working as absolutely hard as they can. They're clipping coupons. They're saving money. They are not farther ahead than my husband and I were 30, 40 years ago."

Her sentiment reflects a broader frustration among Americans who, despite increased wages, find themselves barely keeping pace with rising costs, especially for necessities.

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4. Political Repercussions and Polarized Expectations

The economic discontent played a significant role in the recent presidential election, with President Elect Donald Trump highlighting the high cost of groceries as a key electoral issue:

Scott Detrow [02:17]: "President Elect Donald Trump told NBC this month that the high cost of groceries was a key factor in this election."

Post-election, political affiliations have deepened economic divisions. Republicans, buoyed by voters like Teresa Wolf, express optimism about the future:

Teresa Wolf [02:17]: "I think that we are in the right direction just because we have hope."

Conversely, Democrats largely anticipate an economic downturn in the coming year:

Scott Horsley [07:52]: "Almost 7 in 10 Republicans said they expect the economy to get better once Trump's in office. On the other hand, 6 out of 10 Democrats expect the economy to get worse."

This polarization underscores the nation's divided outlook, with economic perceptions aligning closely with political identities.

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5. The Lingering Effects of Inflation and High Interest Rates

While inflation has moderated, its legacy continues to impact American households:

• Grocery Prices: Despite stabilization this year, a cumulative price increase of 22% since President Biden took office has outpaced wage growth of 19%, leading to persistent financial strain for families.

• Interest Rates: Elevated borrowing costs remain a burden. The Federal Reserve's aggressive rate hikes to combat inflation have resulted in borrowing costs that are still significantly higher than a few years prior. This scenario poses challenges for major purchases like homes and cars.

Teresa Wolf emphasizes the difficulty faced by consumers dealing with high-interest rates:

Teresa Wolf [06:21]: "I meet the ordinary people all day long. Those are who I deal with. And all I hear is complaining how hard it is."

Such financial pressures are particularly acute for lower-income families, with 75% of individuals earning less than $50,000 annually rating the economy poorly.

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6. Trump's Economic Policy Proposals: Promise or Peril?

Looking ahead to Trump's impending administration, there is skepticism about his proposed economic strategies:

• Energy Production: Trump's primary recommendation to lower prices involves ramping up domestic energy production, which is already at record levels.

• Tariffs and Immigration Policies: Economists caution that tariffs could increase prices, especially for lower-income families. Additionally, policies like mass deportations may exacerbate labor shortages, potentially driving up costs and hindering job growth.

Scott Horsley summarizes the concerns:

Scott Horsley [07:08]: "Not really. His main prescription for lowering prices is to increase domestic energy production, but, you know, that's already at a record high. And economists say some of Trump's other policy proposals could actually push prices up."

Despite these concerns, Trump supporters like Teresa Wolf remain optimistic, viewing his election as a beacon of hope:

Teresa Wolf [07:41]: "I am elated and I have hope. Many, many, many people I know are super excited. Even my daughter, who's a liberal, is a Trumper. We've had enough."

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7. The Road Ahead: A Polarized Economy

As the US transitions into 2025, the economic landscape remains divided along political lines. The episode highlights the stark contrast between objective economic data and public perception, amplified by deep political polarization. While the economy shows resilience and growth in official metrics, the lived reality of many Americans paints a picture of struggle and uncertainty.

Scott Detrow concludes by underscoring the challenges of achieving consensus in such a polarized environment:

Scott Detrow [08:14]: "You know, the country is so polarized and so evenly divided, it's really hard to get agreement, even when most yardsticks say the economy's in good shape."

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Conclusion

"The Numbers Were Good, but Feelings Were Bad: The US Economy in 2024" encapsulates the intricate interplay between economic indicators and public sentiment. While data points to a robust economy, the everyday experiences of Americans reveal significant disparities and ongoing financial challenges. As political narratives shape economic expectations, the nation stands at a crossroads, grappling with optimism for the future amidst lingering economic uncertainties.

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Produced by Katharine Fink, edited by Courtney Dorning and Raphael Nam. Executive Producers: Sam and Yenigut.

Transcript

[Scott Detrow]

Hey, it's Scott Detrow. Before we start the show today, we want to say thank you for making consider this part of your daily routine, even in the thick of the holiday season. Listeners like you may consider this and everything you hear from NPR possible. NPR is public media, which means we're here to serve you, and we're here because of you. Thank you so much. If you already support that work through NPR or by donating to your local station, your generosity helps us do our work. If you haven't made that leap to contributing yet, right now before the end of the year is the perfect time. You can sign up for perks like sponsor free listening and bonus episodes ACROSS More than 25 NPR podcasts with NPR today. You can join right now at plus.npr.org that is plus.npr.org thanks. And let's get to today's story. Despite the recent political dysfunction in Washington, the US Economy is ending this year on a high note. Inflation is down. Real wages are up. New figures released last week showed that GDP grew at an annual rate of more than 3% in the late summer and early fall. The Economist magazine has called the United States performance the envy of the world. And Federal Reserve Chairman Jerome Powell says he hears regularly from foreign counterparts who wish their own countries were doing this.

[Jerome Powell]

Well, the US Economy has just been remarkable. When we in these international meetings that I attend, this has been the story how well the US Is doing. If you look around the world, there's just a lot of slow growth and continued struggles with inflation.

[Scott Detrow]

But even as the US Is outperforming most other countries, many Americans remain frustrated by the high cost of living. Two thirds of the people who responded to an Associated Press survey this month described the US Economy as poor. Sydney Siner is a retired autoworker in Lynchburg, Virginia.

[Sydney Siner]

I just think people are working harder than ever. I know both of my sons and my daughter in laws. Everybody's working as absolutely hard as they can. They're clipping coupons. They're saving money. They are not farther ahead than my husband and I were 30, 40 years ago.

[Scott Detrow]

President Elect Donald Trump told NBC this month that the high cost of groceries was a key factor in this election. Since the presidential vote, Republicans and Democrats have flip flopped in their views about the economy. Most Democrats now expect a downturn in the new year, while Republicans like Teresa Wolf are increasingly optimistic.

[Teresa Wolf]

I think that we are in the right direction just because we have hope.

[Scott Detrow]

Consider this. Donald Trump will soon take the reins of an economy that has bounced back strongly during the four years he was out of office. For many families, though, that rebound was overshadowed by soaring prices for food, housing and other necessities. Dissatisfaction with those prices gave Trump an opening to recapture the White House. Will his policies bring costs down or rekindle inflation? From NPR, I'm Scott Detrow. It's consider this from NPR. By most objective measures, the U.S. economy is in good shape. Employers added about 2 million jobs this year. Unemployment is low in much of the country. Gasoline is now selling for less than $3 a gallon. Other prices are still elevated, though, and that has fueled a lot of unhappiness and also a political comeback for Donald Trump. We're going to talk through some of the economic facts and feelings about the year ending and what is ahead with it. PR's Scott Horsley. Hey, Scott.

[Scott Horsley]

Hi. Good to be with you.

[Scott Detrow]

Let's start here. A survey from the University of Michigan last week showed that Americans attitudes about the economy are improving, but they are still not great. So what's going on?

[Scott Horsley]

Yeah, by most objective measures, this is a really good economy. But people who are struggling to keep a roof overhead or put food on their table just don't necessarily feel that way. Reporters like me can talk all we want about strong GDP growth or the near record number of women in the workforce, but to people like Teresa Wolf in Tampa, that just sounds out of touch.

[Teresa Wolf]

The facts are if inflation was where it should be and food prices have come down and rents are under control, honestly I don't think there's any way that Trump would have been re elected.

[Scott Horsley]

Of course, Donald Trump did win the election last month and polls suggest voters unhappiness with the economy was a big part of that.

[Scott Detrow]

So here's where we are. Inflation has come down, but with the exception of things like gasoline, most prices still haven't fallen. Is that a big reason why people are still grumpy?

[Scott Horsley]

It is. Yeah. Inflation has cooled off considerably. But that just means prices aren't going up as fast as they had been. It generally doesn't mean prices are coming down. And grocery prices are a particular sore spot. Even though they haven't gone up much this year. They went up a lot in the two previous years. I talked to Cindy Seiner as she was on her way to the grocery store in Lynchburg, Virginia.

[Sydney Siner]

I think that groceries stand out the most just because we're always at the grocery store and you have to eat.

[Scott Horsley]

In the nearly four years since President Biden took office, grocery prices have jumped by a cumulative 22% while average wages have risen only about 19%. So Federal Reserve Chairman Jerome Powell says he gets why people are unhappy with that.

[Jerome Powell]

We understand very well that prices went up by a great deal, and people really feel that. And it's prices of food and transportation and heating your home and things like that. So there's tremendous pain in that burst of inflation. That was very global. This was everywhere in all the advanced economies at the same time.

[Scott Horsley]

Now, that worldwide spike in prices was primarily caused by fallout from the pandemic and Russia's invasion of Ukraine. But here in the US Government spending likely contributed a bit as well. The good news is wages are catching up now. Average wages have been going up faster than prices for the last 19 months. And with inflation cooling off, workers real buying power should continue to grow.

[Scott Detrow]

But it's not just high prices. It's also high interest rates.

[Scott Horsley]

Yeah, that's right. The Federal Reserve raised interest rates a lot to crack down on inflation. And while they've now begun to lower those interest rates, borrowing costs are still a lot higher than they were a few years ago. And that's really a double whammy for anyone trying to buy a house or a car or some other bigger ticket item. Teresa Wolf sells appliances for a living, and a lot of her customers have to finance those purchases. When the average interest rate on a credit card is more than 20%, that can be really costly.

[Teresa Wolf]

I meet the ordinary people all day long. Those are who I deal with. And all I hear is complaining how hard it is.

[Scott Horsley]

That's especially true for lower income families. Three quarters of the people earning less than $50,000 a year say the economy is poor. And even among people earning twice that much, there's a of dissatisfaction. You know, Ellie Currance lives outside Kansas City and has a young daughter. She and her husband would like to move to a better school district, but Currents told me that just feels like a pipe dream right now.

[Teresa Wolf]

It's just hard. I work full time.

[Scott Detrow]

My husband works full time.

[Teresa Wolf]

You know, I feel like at this.

[Scott Detrow]

Point, we're moving more towards survival mode rather than thriving. All right, so. So, Scott, key question going into 2025, does President elect Trump have a solution for any of this?

[Scott Horsley]

Not really. His main prescription for lowering prices is to increase domestic energy production, but, you know, that's already at a record high. And economists say some of Trump's other policy proposals could actually push prices up. Congressional forecasters say the tariffs that Trump talked about would raise prices, especially for lower income families. And mass deportations could also increase prices and make it harder for employers to keep adding jobs that said, Trump voters like Teresa Wolf are generally upbeat about what's in store. I spoke to her just a few days after the election, and she she said her biggest feeling was relief.

[Teresa Wolf]

I am elated and I have hope. Many, many, many people I know are super excited. Even my daughter, who's a liberal, is a Trumper. We've had enough.

[Scott Horsley]

In the AP survey, almost 7 in 10 Republicans said they expect the economy to get better once Trump's in office. On the other hand, 6 out of 10 Democrats expect the economy to get worse. This is basically a mirror image of what we saw four years ago. You know, the country is so polarized and so evenly divided, it's really hard to get agreement, even when most yardsticks say the economy's in good shape.

[Scott Detrow]

NPR's Scott Horsley, thanks so much.

[Scott Horsley]

You're welcome.

[Scott Detrow]

This episode was produced by Katharine Fink. It was edited by Courtney Dorning and Raphael Nam. Our executive producer is Sam and Yenigut. It's consider this from npr. I'm Scott Detrowed.