Americans Refuse To Be Happy
· The Atlantic
According to Americans, it is bad out there. Real bad. This month, the University of Michigan’s index of consumer sentiment dropped to its lowest point since 1952, when the survey started. A poll of potential Republican voters found that just 43 percent rated the economy as “excellent” or “good” and 55 percent as “fair” or “poor”; for potential Democratic voters, the shares were 5 percent and 94 percent, respectively. Low-income families are nervous, and so are high-income ones. Students and retirees are dour. Rural and urban voters are dissatisfied. People are worried about the present and future. They’re concerned for themselves and their neighbors.
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Indeed, households are feeling worse about their personal finances and the broader state of the economy than they did during the Great Inflation of the 1970s, when the cost of groceries doubled and the government was forced to ration gasoline; the Volcker shock, from 1979 to 1982, when the average interest rate on 30-year mortgages hit 18.6 percent and the country went into devastating back-to-back recessions; the early months of the coronavirus pandemic, when 200,000 firms collapsed, the unemployment rate flirted with 15 percent, and essentials such as infant formula became impossible to find; and the Great Recession, when the stock market lost half its value, the banking system teetered on the brink of implosion, and lenders foreclosed on 6 million homes.
I have been covering the “vibecession” for a few years now, and I thought I mostly understood it. Headline economic statistics are failing to capture the fragility and strain that consumers are experiencing. Families are struggling to afford child care and health care. The housing shortage is eating into incomes. Inflation is pissing consumers off every time they hit the grocery store. Inequality is cleaving the haves and the have-nots. A hiring freeze is preventing young people from embarking on their chosen career. But seeing the latest consumer-sentiment figures and comparing them to hard economic data, I found that my usual explanations fell short.
[Annie Lowrey: The everything recession ]
Americans are expressing some of the deepest, broadest, and stubbornest economic pessimism ever recorded. They’re doing so even though nearly every American who wants a job has one and the stock market is booming. Things aren’t perfect, and people have plenty of reasons to be disappointed. But I couldn’t come up with a coherent explanation for why people are this down about an economy this good, or why they are so mad right now.
Instead of trying to understand why the American people were right, I began trying to understand why they were wrong. We shouldn’t call it a vibecession anymore, I came to think. Vibes are temporary, and whatever this is isn’t going away. It’s a “permacession.” People have stopped believing the economy can be good, and have lost the willingness to admit that they are doing well. That pessimism might be harder to fix than an actual downturn.
At this point, I feel obligated to harp on an unpopular and perhaps even offensive truth—a truth that Americans don’t want to hear and don’t want to believe, a truth that might get me ripped apart in the comments and actually-ed across the internet: This economy is delivering significant improvements in living standards for the majority of American families across the income spectrum. This economy is pretty darn great.
Ninety-six out of every 100 Americans who want a job have one. The rate of underemployment is low, and the rate of labor-force participation is high, meaning that there’s no pool of discouraged workers lurking behind the marquee jobs statistics. Young workers are struggling to establish themselves, given businesses’ caution around hiring. Still, the tight labor market has fueled wage gains that have swelled family budgets, even after accounting for inflation. Real disposable personal income, which measures how much spending power Americans actually have, is at a record high. Inequality has eased, following an extended period in which the earnings of low-income Americans grew faster than those of their rich peers. People are spending more than they ever have on rent and health care, sure, but also on DoorDash and meals in restaurants, vacations, cars, pets, clothing, and “wellness”—concierge doctors, supplements, red-light masks. Part of the reason app-based gambling has taken off is because dudes are flush enough to afford stupid prop bets.
A few years ago, or even one year ago, we had much more reason to worry. In 2022, nominal prices jumped 8 percent, forcing the Federal Reserve to jack up interest rates. Economists debated whether the country would need to undergo a brief recession to restore price stability, or whether we would end up in a 1970s-style stagflationary cycle. Pretty much everyone thought we would enter a double-dip downturn. Yet businesses and households shrugged it all off. Companies kept hiring. Investors kept investing. Families kept spending. Despite the doom and gloom, resilience has been the hallmark of the post-COVID economy. The United States has powered through a change of power in Washington, a trade war, a hot war with Iran, a sharp round of monetary tightening, and an extended government shutdown without the engine giving out.
Look outside this country, and American prosperity comes into sharper relief. Europe’s GDP per capita was 77 percent of the United States’ as of 2008. Now, the continent is half as productive. The American middle class is richer than the middle class of every major European economy. If France and Britain were states, they would be the poorest in the Union.
Look outside this millennium, and the current prosperity becomes dazzling. Americans feel worse now than they did at every financial nadir we have hit since the world wars. Many insist that the middle class had it better in the 1950s and 1960s, when a single income could cover a big suburban ranch house with a picket fence and a yard for the kids. Except that, for most Americans, it could not. The average American today purchases nearly twice as much stuff as the average American did in the early 1990s. Homes are twice as large as they were in the 1960s, when a significant subset of Americans did not have indoor plumbing.
What gives, then? Why do people feel so terrible? A few persistent trends are weighing on consumer assessments of the economy, and a few structural factors are keeping Americans from feeling as comfortable as their bank statements and the national accounts suggest they should.
Inequality is perhaps the most fundamental. The top 10 percent of American earners make as much as the bottom 90 percent. The richest 1 percent of households account for more wealth than the entirety of the middle class. Inequality has frozen intergenerational mobility (a kid born to poor parents has less than a one-in-10 chance of making it to the top fifth of the income ladder) and driven a wedge in life expectancy (rich men live 15 years longer than poor men). This slows growth, destroys social trust, increases judgment and moralism, and saps societal happiness.
Add to this a cost-of-living crisis that has squeezed working families. For more than two decades, the cost of essential services—child care, health care, higher education, and elder care—has crept up faster than the overall pace of inflation. Since the Great Recession, a huge and growing housing shortage has led rents and mortgages to skyrocket. Millions of Americans are living in apartments they consider too small or too shabby, in neighborhoods they do not really want to live in. Millions are putting off getting married, purchasing a home, having a child, starting a business, or switching careers thanks to housing costs.
When the pandemic hit, the price of everything jumped, increasing the salience of the affordability crisis. Once the supply chains unsnarled, the tight labor market came with a strange, uncomfortable downside: Rising wages for low-income workers translated into raising prices for middle- and high-income consumers. Janitors, home-health aides, line cooks, day-care teachers, manicurists, and taxi drivers started making more. Teachers, accountants, social-media consultants, inventory managers, and payroll administrators did not exactly like it.
Then there’s polarization. Republicans and Democrats view the economy far more differently than they used to. What was a 20-point gap in partisan economic expectations during the Reagan and Obama administrations has become a 50-point gap during the Trump administrations. “The size of the partisan divide in expectations has completely dominated rational assessments” of the economy, argues Joanne Hsu, the director of the University of Michigan’s surveys of consumers.
These factors help explain why the vibes got so awful after the Great Recession. But they don’t explain why people are so much more fed up today than they were a year ago or three years ago. Maybe voters are ticked off that prices haven’t come down in the way Trump said they would, Paul Krugman has argued. Maybe the 2022 price spike was “uniquely challenging relative to historical antecedents,” Jared Bernstein and Daniel Posthumus have theorized. Perhaps voters need a few more years of wage gains beating price hikes before they feel good again. Maybe families are furious that gas prices are spiking right before summer travel season. Or maybe this has less to do with the real economy than you might think.
Americans seem to be mad about everything, or in spite of everything. Rates of teen pregnancy, domestic abuse, vehicle crashes, and violent crime have plummeted. Nobody cares. Scientists have saved babies, extended lifetimes, and cured cancers. Nobody cares. Researchers came up with a drug that takes the struggle out of dieting. Nobody cares. The unemployment rate goes up. Nobody cares. The unemployment rate goes down. Nobody cares. Inequality goes up. Nobody cares. Inequality goes down. Nobody cares. Or rather, everybody cares. And they’re cynical and furious.
As Sam Peltzman of the University of Chicago has found, the country has experienced “a sudden, sharp and historically unprecedented decline in self-reported happiness,” across “nearly all typical demographics and geographies.” Roughly 20 to 25 percentage points more Americans described themselves as “very happy” than “not so happy” from 1970 to 2020. Then, the “not so happy” group swelled and the “very happy” group shrank, narrowing the gap to zero to five percentage points, where it has remained. He calls it the “happiness crash.”
[From the February 2025 issue: The anti-social century ]
The crash coincides with a collapse in institutional confidence: Americans are giving up on the Supreme Court, the military, corporations, the education system, religious groups, medical professionals, and scientists. It also coincides with a collapse in civic trust. Fewer people think that their neighbors are trustworthy; fewer believe that the political system can or will deliver for them. Fair enough, I guess. Institutions haven’t exactly acquitted themselves well since the Great Recession. Still, the internet nurtures these Hobbesian, splenetic views. We never got back to socializing in person after COVID, as my colleague Derek Thompson has noted. And the social media we replaced our friends with lost the social part. In a few decades, we have gone from comparing ourselves with our neighbors to comparing ourselves with our friends on Facebook to sucking on a gavage tube of unabashedly consumerist, questionably accurate, highly emotional, and extremely polarizing short-form video content, milled for us by attention-farming software.
TikTok videos and Instagram reels make people fiscally delulu—I hate myself—encouraging manic spending and inculcating “money dysmorphia.” At the same time, they give people a delulu—yet I can’t stop—sense of how the economy is doing. I searched for phrases such as how jobs are doing and keywords such as hiring and economy 2026 while writing this story. I was not presented with a bunch of videos about how the jobless rate is 4.3 percent, or the surprising fortitude of the American economy, or the fact that Gen Zers are off to a better financial start in life than Millennials were at the same age. Instead, I saw a bunch of fake ads for fake jobs, nonsensical class analyses, and slop about how AI is crashing the whole labor market, along with crypto spam. This kind of negativity drives engagement. To be fair to TikTok, even the real news has gotten far more dire. Because we live in a complicated, unequal, and expensive economy, there’s always a true-but-incomplete scary story to tell.
People are distressed about gas prices and inflation and the housing market. Or they’re distressed about everything, and gas prices and inflation and the housing market are fuel for their dissatisfaction. Or they’re distressed about everything because they’re shotgunning horror stories about how fragile the economy is while watching people redecorate their casitas in earth tones, and so they’re redecorating their bedroom in earth tones, and they’re terrified because Donald Trump is in the office or because one day he won’t be. (I think.) And if you point out the prosperity we are all experiencing, if definitely not enjoying, people berate you for being snooty and/or naive.
In a roundabout way, the country’s affluence might be contributing to its pessimism. Seventy years ago, voters were overwhelmingly concerned with life-and-death issues: war, hunger, disease, violence. Today voters are more worried about social concerns: the environment, minority rights, immigration, health policy, casitas, I guess. They have shifted from materialism to postmaterialism, in the framing of the political scientist Ronald Inglehart. And postmaterialism has driven the rise of identity politics, which revolve more around who a person is and what they want rather than what they truly need.
I don’t see an easy salve for what’s ailing us, even if prices at the pump go back down. People aren’t going to change how they spend their time. Social-media platforms aren’t going to change what kind of content they deliver. Voters aren’t going to become less jaded, polarized, riven by contempt, puffed up on self-righteousness, or susceptible to fearmongering, just as they won’t become more trusting of major institutions. If measurable improvements in the economy have little effect on measured sentiment, a crucial feedback loop between good politics and good policies is broken. We may end up with the economy we fear we already have—and if that happens, I suppose you could say that we asked for it.