Why the US economy looks strong but feels bad to many
The US economic expansion is in its seventh year, and there is no recession in sight.
asserted
expansion → look → sight
Consumer spending data suggest that Americans are splurging on things like live entertainment, travel and eating out.
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Americans → suggest → entertainment
The economy is growing at its fastest pace in a year.
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economy → grow → year
A significant portion of Americans say it feels like the economy is stacked against them.
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economy → say → them
Polls indicate that they are stressed out about the cost of living, anxious about job security, and pessimistic about their economic future.
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they → indicate → future
And do not even get them started on gasoline prices.
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them → get → prices
Economic issues keep showing up as voters’ top concerns ahead of the US midterm elections on Nov 3.
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issues → show → Nov
But are things as shaky as many say?
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many → say → ?
How much have prices gone up?
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prices → go → ?
Americans confronted the hottest inflation in more than four decades in the years immediately following the Covid pandemic.
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Americans → confront → pandemic
They are still struggling with sticker shock.
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They → struggle → shock
Prices continue to go up, though at a slower pace than a few years ago.
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Prices → continue → pace
The basket of goods and services measured by the US Bureau of Labor Statistics’ consumer price index was 3.7% higher in September than a year earlier.
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basket → measure → September
That is less than half the 9.1% pace of inflation reached as the US emerged from the pandemic.
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US → reach → pandemic
But it is still high enough for people to notice.
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people → notice → ?
The steady rise in prices comes on top of the post-pandemic spike.
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rise → come → spike
Eating out is close to 40% more.
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Eating → eat → ?
Auto maintenance jumped by more than half and car insurance by about 48%.
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maintenance → jump → %
Prices are almost always rising, but usually not this fast.
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Prices → rise → ?
In the decade before the pandemic, annual inflation averaged around 1.8%.
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inflation → average → %
That is in part because the economy faced a series of shocks that accelerated price gains.
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that → face → gains
Supply chains stretched and broke in 2021 after the global economy reopened.
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economy → stretch → 2021
Then Russia’s invasion of Ukraine choked off fertiliser, wheat and oil shipments, sending food and fuel prices higher.
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invasion → choke → prices
The Trump administration’s “Liberation Day” tariffs spooked markets, and subsequent levies raised prices on many goods.
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levies → spook → goods
The buildout in artificial intelligence technology fuelled business investment and construction hiring but also sent prices for computer software and components higher.
And most recently the Iran war has led to higher energy prices and rising borrowing costs.
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war → fuel → prices
“Supply shocks have come more frequently, hit harder and lasted longer,” Federal Reserve Bank of Chicago president Austan Goolsbee said in a speech in London in September.
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Goolsbee → come → September
In an effort to tamp down inflation, the Fed in September raised interest rates for the first time since 2023, but left them unchanged at a subsequent rate-setting meeting in October.
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Fed → tamp → October
How are Americans getting by?
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Americans → get → ?
But adjusted for inflation, pay has barely kept up with rising prices.
And even the marginal gains Americans have made are beginning to evaporate.
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Americans → adjust → prices
Inflation-adjusted pay was down from a year earlier for six straight months as of September.
Even so, workers continue to spend – tapping a range of resources to do so.
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workers → adjust → resources
Some people work in the gig economy.
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people → work → economy
The stock market hit a series of records this year, lifting investor portfolios.
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market → hit → portfolios
Home values have grown substantially over the past few years, and big tax refunds in 2026 boosted household budgets.
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refunds → grow → budgets
Sluggish wage growth alongside rising prices has forced many to save less – or not save at all.
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growth → rise → less
What is happening in the job market?
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What → happen → market
On the good news front, plenty of people are earning a paycheque.
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plenty → earn → paycheque
The US economy is by many measures operating at or near full employment.
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economy → operate → employment
The unemployment rate is historically low, though it edged higher, to 4.2%, in September.
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it → edge → September
Healthcare, construction and manufacturing have all been adding jobs in recent months.
And the labour force participation rate also rose in September, typically a positive sign that more people are looking for work.
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people → add → work
But sector-specific strength and the low unemployment rate mask a sluggish job market.
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strength → mask → market
…and 25 more, not listed.
The Aporia
