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Data can't convince Americans the economy is doing well

Bloomberg logoBloomberg 6/26/2019 Luke McGrath

Stock indexes are flirting with all-time highs and unemployment is at its lowest level since 1966, but many Americans still don’t think the economy is doing too hot.

A new Bankrate survey of more than 1,000 U.S. consumers found 39% believe the economy is “not so good” or “poor.” A sample of financial experts, in comparison, all rated the economy as “good” or “excellent.” The survey was conducted via telephone May 21-26, with a margin of error of less than 4%, according to Bankrate.

Lower-income Americans are simply not doing as well as macro indicators suggest, said Julia Coronado, an associate professor of finance at the University of Texas at Austin and one of the nine experts surveyed. “There’s growing inequality,” she said. “Even though the data show that low-wage earners are getting more raises recently, they’ve endured years of high unemployment and stagnant wages. So a couple of years with a few wage gains isn’t really changing their perception of their economic situation.”

Many Americans are ill-equipped for another recession, the survey found. Half said they’re not comfortable with their emergency funds, and 28% said they have no emergency savings at all. Only 18% said they have enough money to cover six months of expenses, the lowest number in the poll’s nine-year history.

“Saving is a luxury,” said Coronado. “It’s not that people who are at the lower end of the earnings spectrum are living extravagant lives or living irresponsibly, they are just simply constrained and paying their bills.”

It’s easy to understand why so many Americans are pessimistic, she said. “There’s a long shadow from the Great Recession. People are still fearful of going back to that kind of a downturn.” 

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