The Rising Economy Facing Widespread Public Disapproval: Key Reasons Explained

Economic data shows the US economy is growing rapidly, with a 4.3% annualized GDP rate in recent months. However, this strong growth contrasts sharply with the negative sentiment among many Americans.

Consumers are not feeling the benefits of this fast expansion because job growth remains weak and inflation persists. Moody’s Analytics chief economist Mark Zandi states, “People know jobs. They know they can’t find a job if they lose theirs.” Inflation impacts daily expenses such as coffee, electricity, and child care, eroding purchasing power.

Unequal Gains in Consumer Spending

Consumer spending, a major driver of recent GDP growth, has disproportionately come from higher-income households. These groups benefit from rising home values and strong stock market returns. Meanwhile, many lower- and middle-income Americans struggle financially and have cut back on spending.

Mike Reid of RBC Capital Markets describes this trend as a “K-shaped economy,” where “retirees and the top 10% continue to drive the economy” while others lag behind. This uneven recovery fuels dissatisfaction among a large portion of the population.

Inflation Remains a Concern Despite Mixed Price Trends

Although some essentials like eggs and gasoline have become cheaper, other necessary goods and services have grown more expensive. Electricity costs are up by 7%, natural gas by 9%, and ground beef surged 15% over the past year, impacting household budgets. Bank of America data shows wage growth outpaced inflation only for high earners; middle- and low-income workers saw smaller increases of 2.3% and 1.4% respectively.

Labor Market Uncertainty Adds to Consumer Worries

Job security is a major concern. The unemployment rate rose to 4.6%, the highest level in four years. More people are job-seeking than there are positions available. Consumer confidence surveys reveal fewer expect job openings to increase, contributing to economic pessimism.

Businesses are also slow to hire due to automation advances and uncertainty from trade policies. Many employers have paused hiring or reduced staff to avoid increased costs from tariffs.

Although the GDP growth figure is impressive, it does not fully reflect the experience of many Americans. Stable inflation, secure jobs, and paycheck growth that matches living costs are crucial for improving Main Street’s mood and broader economic confidence.