The stock market is up. The rate of inflation is down. And most of the data paints a picture of relative economic health. So, why do so many Americans feel pessimistic about the U.S. economy?

A recent poll published by Bankrate suggested 59% of Americans feel like the economy is in a recession. That, of course, is a far cry from the numerical truth. Officially, it takes two consecutive quarters of contracting GDP (negative growth) to rubber-stamp a recession. The latest statistics showed the U.S. economy grew 5.2% annualized in the third quarter, the strongest growth in two years.

A separate poll published by CBS News helps explain the disconnect. That poll included a question asking, “How do you determine how the economy is doing?” Eighty-five percent of respondents cited “Their own experiences,” far more than the 66% who base their opinions on “National data.”

Mainstream media, of course, focuses its attention on national data and macro trends. For most of 2023, those trends have shown economic resilience, strong consumer spending, low unemployment and corporate earnings that outperformed expectations.

Inflation, however, carries an excessive amount of influence on economic opinions and we’re still in the late stages of the biggest inflation battle of our generation. Daily life for most Americans — buying groceries, paying bills, going out to dinner, etc. — is filled with reminders that almost everything is more expensive.

The most recent Consumer Price Index (CPI) showed 3.1% inflation from a year earlier. The pace of inflation, in other words, is decreasing. But in absolute terms, the price of goods and services continues to climb, albeit at a pace more in line with historical averages.

Oftentimes, the data can be open to interpretation. Consumer spending is a perfect example. Credit card debt for American consumers just reached a record-breaking $1 trillion (fewer than 20 countries generate GDP that large)! Should this be reason for concern, especially given the average interest rate on those cards is more than 22%? Or is stubbornly strong consumer spending, which makes up two-thirds of U.S. GDP, a sign of economic health?

There are other legitimate factors leading American families to feel uncomfortable about their financial well-being. Massive government stimulus during the pandemic cushioned the hardship for many, but those checks from Uncle Sam are long gone, temporarily deferred student loan payments have returned, and higher interest rates make the cost of financing car and home purchases more prohibitive.

The unwinding of family-friendly work-from-home policies may also contribute to dissatisfaction. Even if a return to the office brings few financial consequences, it’s another negative input in the equation of whether you might be better or worse off.

On the other hand, the stock market — a leading economic indicator — has been exceptionally strong. The S&P 500 has gained 15% from its late October low, just closed at its highest mark this year and is within a few percentage points of its all-time high. Predictors of a “soft landing” (beat inflation, avoid recession) seem likely to be proved right.

But not all Americans have benefited equally. Those who own meaningful amounts of stocks and real estate have seen those assets rise dramatically. If, however, you have smaller account balances or aspire to own a home, they have become evermore expensive.

Some benefits are more universal. Gasoline prices have fallen precipitously. The national average is down to just above $3 per gallon, according to AAA. That’s a decrease of 20% since September and 40% cheaper than in Summer 2022 when average gas prices rose close to $5 per gallon.

Ultimately, personal incomes may be the most important component of one’s financial comfort, which many of us extrapolate to “economic health.” Data from the Bureau of Labor Statistics showed that wages have risen 4% from a year ago, outpacing 3.1% inflation over the same period.

If that trend continues, we can expect more families to feel confident in their economic outlook.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.