Reality check: What's up with the economy?

If you ask Americans which issues will most affect their votes this November, the number 1 response is the economy. The number 2 answer is inflation. [Wait ... isn't inflation part of the economy?]

Well, never mind! The point is, we're concerned about money. Now, if you're the "Sunday Morning" reality checker today, you might be a little bit confused, because most of the economic numbers are actually looking pretty good!

Our unemployment rates are near a 50-year low …

Interest rates have been dropping , and the Federal Reserve says it will drop the prime interest rate even more this month …

Wages, disposable income, and personal wealth are all up!

Now, the pandemic did kick off an inflation spiral, so a lot of prices are still much higher than they were a couple of years ago. But now, inflation has cooled almost all the way back down to where it was before the pandemic; it's 2.9%.

• Inflation is cooling, yet many Americans say they're living paycheck to paycheck

So, if all these economic indicators are so good, why do so many Americans feel as though the economy is bad?

Justin Wolfers, a professor of economics at the University of Michigan, said, "The really interesting thing is, if you ask Americans how they're doing, they say pretty well. If you ask them how the economy is doing, they say terrible.

"What they tell pollsters is, they dislike the economy. But let's look at what they actually do . You have to be really optimistic about the state of the economy to spend more, rather than saving for a rainy day. People are doing that .

"New business starts are through the roof . Stocks are at an all-time record . Over and over, when you look at what people do, they're making choices as if they believe in the future of this economy," said Wolfers.

So, how is our country doing compared with the rest of the world?

"It turns out if there's an economic Olympics, the U.S. is going to win gold," Wolfers said. "We are recovering faster, getting more jobs, and more GDP, and our inflation is falling faster – back towards normal – than almost any other country."

Now, this is not to say that the price of groceries isn't a kick in the gut these days, or that everyone's sitting pretty. It is saying that things are mostly back to normal, and getting more normal all the time.

For more info:

• Justin Wolfers, economics professor, University of Michigan

Story produced by David Rothman. Editor: Mike Levine.

See also:

• Reality check: What we get wrong about crime
  
• Reality check: How divided is America, really?