In The Wall Street Journal's recent survey of swing states, a significant 74% of respondents believed that inflation had worsened over the past year.
However, this common perception, shared across all seven states surveyed, does not align with the factual reality.
Based on concrete economic data, it is evident that inflation has actually improved in the last year.
Examining the 12-month period leading up to February, the long-standing consumer-price index indicates inflation at 3.2%, compared to 6% a year earlier. Even when considering different timeframes or using alternative measures like the index favored by the Federal Reserve, the results remain consistent. Even after excluding food and energy costs, inflation remains on a downward trajectory.
While certain individuals may have experienced higher inflation, such as those purchasing a home, for the average person, inflation has decreased.
Despite this, there is a prevailing belief that inflation has increased, indicating a disconnect between public perception and economic reality.
This disparity extends beyond inflation.
A significant portion of respondents in the Journal's poll believe their investments or retirement savings have declined over the past year, despite the stock market's record highs, stable or rising home values, and increased interest on savings. Similarly, a majority feel the economy has worsened over the past two years, despite indicators such as strong employment growth, low unemployment rates, and accelerated GDP growth.
This gap between perception and reality is not easily explained by simple misunderstandings.
While some may confuse high prices with high inflation, this does not account for the widespread misperceptions revealed in the survey.
Additionally, other economic indicators, such as consumer spending on groceries and dining out, have increased, further complicating the narrative of a deteriorating economy.
The discrepancy between perception and reality is likely driven by a deeper pessimism about the country, which influences how people perceive economic issues like inflation.
This broader pessimism may be exacerbated by media coverage, which tends to focus on negative news.
However, media negativity alone cannot explain the public's pessimism, as people also rely heavily on their own experiences and biases to form opinions.
In conclusion, the disconnect between public perception and economic reality, particularly regarding inflation and the economy, reflects a deeper sense of pessimism about the country.
Addressing this pessimism will require more than just improving economic indicators; it will necessitate addressing broader societal concerns and changing how information is consumed and interpreted.