Subject: Re: Economic Disconnect
What explains this discrepancy?"

"The unemployment rate stands at 3.5%, as low as it has been since the 1960s. Over the last year, the U.S. economy has added an average of 312,000 jobs every month. Despite predictions of a recession, economic growth has been 2.0% or higher in the last four quarters. Inflation, while still elevated, is down to 3.2%. As a result, real wages have increased slightly over the last year. "

What explains it? These four charts:

https://fred.stlouisfed.org/se...
https://www.eia.gov/dnav/pet/h...
https://fred.stlouisfed.org/se...
https://fred.stlouisfed.org/se...

The first is Federal Reserve Economic Data for real wages, the second is EIA's gas prices, the third is the Case-Schiller home price index, and the last is mortgage interest rates.

Basically, real wages have not yet recovered to pre-pandemic levels. They're actually still lower than before COVID hit. And prices are still very, very high. Sure, the rate of inflation is "down" to 3.2%. But that's still higher than the decade before the pandemic. And again, prices are still very elevated - it's not like prices returned to pre-pandemic levels the way real wages did. So gasoline prices - which are among the most visible of consumer prices - aren't increasing quickly any more, but they're still close to $4.00 per gallon. Prices are still much higher than people are used to, which erodes people's confidence in the economy.

Meanwhile, the housing markets are causing a lot of pain. Mortgage interest rates are higher than they've been in 20 years. Prices are still nearly twice what they were at the peak of the 2008 housing boom. Anyone looking for a house these days is very, very frustrated.

When Biden took office, the inflation rate was 1.3%, mortgage rates were 2.75%, and gas was $2.42 per gallon. Today, those figures are 3.2%, 7.2%, and $3.95 per gallon - all of which are vastly higher not only than from when Biden began his term, but the decade or so before that. Those are all things that voters notice a lot, and affect their view of the health of the economy. It is not some big puzzle why voters have a negative sentiment about the economy. Other than the unemployment rate (which is very good) and maybe GDP growth (which is okay, but at best mediocre) most current economic indicators aren't that great.