Why so many Americans are dissatisfied with the seemingly solid economy

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• Geoff Bennett:

  Let's take a closer look now at this disconnect between what are solid economic numbers and the way many people say they feel about this economy.

  Voters said they were upset about the cost of living, and that helped elect Donald Trump to a second term.

  Our economics correspondent, Paul Solman, reports now from Ohio on how many Americans see this in the wake of the election.

• Paul Solman:

  Outside of Kroger in Delhi Township, Ohio, where almost 70 percent of voters went for Donald Trump.

  How's the economy for you?

• Woman:

  It's horrible.

• Man:

  It's bad enough for a lot of people.

• Man:

  I think everyone could be doing a little bit better right now.

• Paul Solman:

  In exit polls, more than six in 10 voters rated the economy as not so good or poor; 69 percent of them cast their vote for Trump. That's despite slowing inflation, solid growth, and low unemployment, says Columbia's Adam Tooze.

• Adam Tooze, Columbia University:

  It's really the most dramatically successful recovery the United States has possibly ever seen from the kind of shock that we saw in 2020, but it doesn't translate down to a simple experience of well-being for very large numbers of people.

• Esther Wells, Accountant:

  The economy currently is not working for me and my family.

• Paul Solman:

  Single mother Esther Wells voted for Hillary Clinton in 2016, Trump in 2020. This year, she says, the economy kept her with Trump.

• Esther Wells:

  Some of the rhetoric that came out to Black people and minorities, like, this is your chance to vote for the first Black woman. And, to me, it was like, that is not my number one issue. How are you going to make things better for my family? It was about affordability of food, of gas, of heating, energy.

• Paul Solman:

  Like Wells, many Americans are comparing the cost of living to what it was four years ago and blaming inflation. Technically, inflation is the rate of price change over time, and that annual rate has slowed.

  But they're looking at the long-term climb.

• Stefanie Stantcheva, Harvard University:

  Inflation is when things are too expensive, or inflation is when I can no longer afford anything.

• Paul Solman:

  That's what people reported to Harvard's Stefanie Stantcheva in surveys she conducted about inflation.

• Stefanie Stantcheva:

  That their wages are just not keeping up with prices.

• Susan Binder, Service Industry Worker:

  Especially in the service industry — I'm in the food industry — $15 an hour, and that's impossible.

• Stefanie Stantcheva:

  Inflation really triggers a sense of injustice and inequity, because lots of people say that the wages of higher-income people are much better able to keep pace with prices.

• Paul Solman:

  Outside Kroger, grocery prices were a common gripe.

• Tom Fisher, Shopper:

  Four years ago, I could go to Kroger's, and it cost me $125. Now it's costing me close to $200.

• Woman:

  The prices are just skyrocketing. and I'm paying double what I was paying a few years ago, so, yes, it's horrible.

• Paul Solman:

  Grocery prices are up some 25 percent since the pandemic, but just 1.1 percent from a year ago. It's not just groceries, though.

• Woman:

  A couple years ago, I could just kind of do my own thing and make my money, pay my bills, have extra to do fun stuff. Now I can't.

• Man:

  You know, you're putting all your money into rent and bills and whatnot, and it's just hard.

• Esther Wells:

  I have two young children. Day care prices continue to rise, and without any assistance, it has become a challenge.

• Paul Solman:

  Higher interest rates have added to the cost of living, says Jason Newell, but aren't even counted in the official inflation rate.

• Jason Newell, Engineer:

  I saw a statement from I think it was America Express 28.9 percent. It's criminal.

• Esther Wells:

  It is almost untenable for millennials like myself, young families in our 30s, who have good jobs to be able to buy into a starter home.

• Stefanie Stantcheva:

  If you go and purchase a car using an auto loan, or if you want to purchase a house with a mortgage, those are costs that people consider to be part of their cost of living, yet they're not reflected in these inflation numbers that we see.

• Paul Solman:

  Inflation has slowed over the last two years, says Tooze, but during peak COVID:

• Adam Tooze:

  If you got into trouble financially in that period, if you were stressed, if you ended up running up an overdraft on all your credit card bills, you're still dealing with the pain that you felt in that period and the anxiety that you felt there. And you will compare this with how you felt between 2017 and early 2020, before COVID hit, and you will realize that, in that period, under Donald Trump the first time around, you felt like you were doing better every single week.

• Paul Solman:

  Even if you weren't, but that's how lots of folks feel.

• Woman:

  Our economy was a lot better. It was like, I could eat and I could do stuff.

• Man:

  It seemed to be on the uptick and then Biden took over and it just went…

• Woman:

  It went down after Biden took over.

• Stefanie Stantcheva:

  Inflation tends to leave really lasting impacts on people, both because they had to make true adjustments to it and also emotionally. And I think this episode is definitely leaving some scars. So when we ask people about their experiences, they're not just reporting what they think has happened in the couple of months before that or even the year before that, but really what has happened over this whole inflationary episode.

• Paul Solman:

  And former Treasury Secretary Larry Summers recently pointed out that higher prices affect everyone.

• Larry Summers, Former U.S. Treasury Secretary:

  If you have extra unemployment, it's 2 percent of people who don't have jobs. And if you have extra inflation, it's 100 percent of people who see higher prices.

• Paul Solman:

  So many of whom already resent long-term real wage stagnation.

• Larry Summers:

  Moreover, people get a 7 percent raise and there's 7 percent price increases, they don't say to themselves, well, there's kind of zero real wage. They say to themselves, I did a fantastic job and I got a 7 percent increase. And it all got taken away from me by inflation.

• Paul Solman:

  So who do folks blame?

• Stefanie Stantcheva:

  People do mention the government as a major cause of inflation. People say I feel a lot of anger, a lot of fear. And when we ask them who this anger is directed at, lots of people said the government.

• Paul Solman:

  But economist Carola Binder says that, for many, inflation is mainly a label.

  Carola Binder, University of Texas at Austin: I think for a lot of people, inflation can be a catch-all for just a bad economy or economic uncertainty.

• Paul Solman:

  And in her research, Binder found that people's perceptions were influenced by their politics.

• Carola Binder:

  When they're of the same political party as the president, they expect lower inflation. And when they're of the opposite party of the president, they expect higher inflation.

  During the Biden administration, that partisan gap in expectations of inflation got a lot bigger. So as inflation started really rising in 2021 and 2022, Democrats still expected inflation to be about the same as they had before. But Republicans' inflation expectations rose a lot.

• Brian Brenberg, FOX News Contributor:

  So now you have got inflation top of inflation. I don't see a big end in sight.

• Carola Binder:

  We also saw that that's probably due to differences in how the media was reporting on inflation.

• Ali Velshi, MSNBC Anchor:

  The Biden administration has been calling it transitory, in other words, short-term, not permanent.

• Carola Binder:

  Whether the media was saying that it was going to be transitory or that it was going to be something longer-lasting.

• Paul Solman:

  Binder's work was done well before Election Day, but in retrospect, her results should have been a warning for the Democrats.

• Carola Binder:

  If you look at the expectations of independents, we saw that they were actually closer to the expectations of Republicans. You could look back at it and say, well, a lot of independents did seem as worried about inflation nearly as Republicans.

• Paul Solman:

  We're about to see how they will feel if the cost of living doesn't return to pre-COVID levels, or, worse, starts rising faster once more.

  For the "PBS News Hour," Paul Solman.

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