The Economist says the pandemic has “broken” people’s perceptions about the economy.
“Although Americans report being worried about their finances, they are behaving as flush as ever—and in economic forecasting, actions speak louder than words. When used to project future spending rather than consumer sentiment, the same battery of economic variables has fully maintained its forecasting power since 2020. In contrast, since Covid began, the correlation between sentiment and both current and future spending has vanished.”
Jonathan Last: “I hear every person who says that times are tough for them and I honor and respect that. But in the aggregate, people’s views are not just a little bit off. They are wildly out of sync with reality.”
