New Data Shows The Vibes Are Finally Catching Up With The Good Economy
Consumer sentiment just surged to its highest level since July 2021. How Americans feel about the economy is beginning to match the booming economic data.

Thank you for reading! With media layoffs rattling the industry and the 2024 election looming, support for journalism has never been more crucial. If you value in-depth, honest analysis, consider becoming a free or paid subscriber to my newsletter. My content isn’t paywalled, but paid subscribers empower this work and gain access to exclusive community features. Your subscription makes a difference.
There’s been a stark disconnect between how most Americans feel about the economy and the objectively surging economic data. All indicators point to a booming economy that has experienced a remarkable post-pandemic recovery. In spite of this data, Americans have been telling pollsters they feel the economy is in bad shape. That appears to be changing.
The University of Michigan’s new “Surveys of Consumers” data shows that the US Index of Consumer Sentiment surged 13% from December to 78.8 this month, its highest level since July 2021. In December and January, there has been a remarkable 29% cumulative rise in sentiment, marking the most significant two-month increase since 1991.
Surveys of Consumers Director Joanne Hsu outlined the improvement and noted that this positive economic outlook is being seen among both Democrats and Republicans:
“December was no fluke… Consumer views were supported by confidence that inflation has turned a corner and strengthening income expectations… Democrats and Republicans alike showed their most favorable readings since summer of 2021. Sentiment has now risen nearly 60% above the all-time low measured in June of 2022 and is likely to provide some positive momentum for the economy. Sentiment is now just 7% shy of the historical average since 1978.”
According to the index, inflation expectations have also improved: “Year-ahead inflation expectations softened to 2.9% after plunging in December. The current reading is the lowest since December 2020 and is now within the 2.3-3.0% range seen in the two years prior to the pandemic.”
Corroborating this new consumer sentiment index is data from last month. Politico highlighted that consumer sentiment is on the upswing, and business outlooks have drastically improved:
“Data this week from the Conference Board’s index, which measures views of business conditions and the job market, amounts to a cornucopia of promising news for President Joe Biden. Recessionary fears are at their lowest point since 2022. Enthusiasm over the nation’s financial future is trending up. And more people are planning to make big-ticket purchases.”
This surge in economic sentiment is starting to be reflected in polling. A hilariously named Axios Vibes survey by The Harris Poll had some encouraging findings. When consumers were asked about their own personal financial situation and not the broader economy, the result was overwhelmingly positive:
“63% of Americans rate their current financial situation as being ‘good,’ including 19% of us who say it's ‘very good’…”
“Americans' outlooks for the future are also rosy. 66% think that 2024 will be better than 2023, and 85% of us feel we could change our personal financial situation for the better this year…”
“77% of Americans are happy with where they're living — including renters…”
It’s interesting that Americans tend to feel better about their personal financial situation than the broader economy. What’s responsible for this? Perhaps media coverage and partisanship. When right-wing media is constantly telling their viewers the economy is terrible under President Biden and the mainstream media constantly covers polls showing weak outlooks on the economy, our perception of reality can be altered.
The Wall Street Journal published data that bolsters this theory. Media coverage has been very negative on the economy over the past three years as Americans struggled with rising prices. But in recent months, as economic data improved, so did news coverage. This coincides with the rise in consumer sentiment data.
When analyzing the Index of Consumer Sentiment and news sentiment in economic coverage, it appears to be closely correlated. Media coverage has a clear impact on consumer sentiment.
So, why are people finally starting to feel good about the economy? Well, because the economy is objectively good.
The Economic Data Bolstering Consumer Sentiment
While President Biden has been mocked for trying to make “Bidenomics” a thing, the numbers don’t lie: The economy under his administration is damn good, especially when compared to where we were before he took office.
Democratic Strategist Simon Rosenberg outlined some of these numbers in his latest piece for MSNBC:
“Our economic recovery has been better than any other G7 nation. GDP grew at an annual rate of 4.9% last quarter, and more than 3% for the Biden presidency. We have the best job market since the 1960s and the lowest uninsured rate in U.S. history. The Dow Jones broke 37,000 [in December] for the first time. Wage growth, new business formation and prime-age labor participation rates are all at historically elevated levels. Prices fell — yes, fell — last month. Rents are softening, and gas prices and crime rates are falling. Domestic oil and renewable production are at record levels. The annual deficit, which exploded under Trump, is trillions less today.”
Justin Wolfers, Economics Professor at the University of Michigan, has been spotlighting how wrong the recession predictions have been. In a post on Twitter/X, Wolfers shared a chart (with a hint of sarcasm) that shows just how well things have been going since the pandemic:
It’s looking like President Biden and Federal Reserve Chairman Jerome Powell’s approach to the economy is paying off. We could very well get the “soft landing” we were hoping for. If trends continue, we will have deployed massive stimulus to help Americans and then successfully utilized monetary policy to hike rates and reduce inflation - all while avoiding a recession.
Powell has suggested that we could see up to 3 rate cuts in 2024. Rate cuts would boost corporate investment, increase borrowing, and offer opportunities for millions of Americans to refinance their homes.
Another positive is that wage growth started outpacing inflation in the last half of 2023. If that continues on top of broader positive momentum, more Americans will continue to “feel” the benefits of this objectively good economy.
Of course, this doesn’t mean there aren’t any Americans who are struggling. But as a whole, it’s clear the American economy is healthy and on a clear upswing, defying incorrect predictions of a looming recession and negative media coverage.
All signs point to more economic improvement this year. The economy is a key indicator impacting the incumbent president’s re-election likelihood. We’ll see if this surging consumer sentiment begins to reflect in President Biden’s poll numbers. The credit would be deserved because his administration’s policies have helped America navigate out of the COVID-19 recession.
As I outlined in my article expressing optimism for the 2024 election, this improving economy will likely boost President Biden’s chances. Time will tell. But one thing is for sure: The vibes are shifting in a positive direction.